Rainfall in Australia and India is improving wheat crop prospects, adding to price pressure

Global wheat prices remain low under pressure from weak demand and increased supply from exporters, while improving weather conditions in Australia and India add pressure on quotations.

Frosts in the US did not affect prices because they were short-lived and crops were covered by a significant layer of snow.

March futures for wheat yesterday had the following dynamics:

• remained at $219.2/t - for soft winter SRW wheat in Chicago (0% for the week),
• increased by 1.6% to $226.9/t - for hard winter HRW wheat in Kansas City (+0.3%),
• fell by 0.1% to $256.8/t - HRS durum wheat in Minneapolis (-0.1%)
• rose by 0.3% to €238.6/t or $243.9/t - for wheat on the Paris Euronext (+0.7%).

According to Reuters, rainfall in Australia led to hopes for a bigger harvest of wheat and other crops than previously forecast, when meteorologists expected the El Niño phenomenon to bring heat and drought. Wheat production may reach 30 million tons compared to 24-25 million tons in 2022/23 MR. Eastern and southern Australia are expected to see normal rainfall in the coming weeks, but it is not yet clear whether El Niño's influence has ended.

India increased the area of all oilseed crops by 106,000 hectares, and grain crops - up to 39.3 million hectares, including wheat - up to 34 million hectares, corn - from 2.057 to 2.129 million hectares.

According to the USDA forecast, in 2024, the U.S. winter wheat planting area will decrease from 36.699 to 34.425 million acres compared to last year, while analysts estimate it at 35.7 million acres. S&P Global expects that 11.1 million acres of spring wheat will be planted in the US in 2024, or 100,000 acres less than in 2023.

According to the forecast of the Canadian Agency for Agriculture and Agro-Industrial Industry, in 2024/25 MR, the wheat sowing area will decrease compared to the previous season from 10.94 to 10.73 million tons, but thanks to an increase in yield by 8%, the total production will grow by 4.2 % to 33.3 million tons.