Weather factors are returning and pushing prices up again

On the world stock exchanges, for two weeks, the prices of raw materials collapsed against the background of the strengthening of the dollar and in anticipation of an economic recession, which forced investors to withdraw funds to safer assets. However, the news about this year's crop being reduced due to drought piqued traders' interest and pushed prices higher.

At the beginning of the week, due to dry weather, the European Commission lowered the forecast for the production of soft wheat in the EU in 2022/23 MR by 5.3 million tons to 125 million tons (130.1 million tons in 2021/22 MR). However, wheat quotes fell all week, and only yesterday they rose immediately by 4% with the help of speculators.

The wheat harvest in the EU is accelerating, with early data confirming reduced yields in some regions due to drought and extreme heat. However, against the backdrop of the blockade of Ukrainian ports, the EU remains the main supplier of wheat for many importers.

Agritel experts predict that Romania will harvest 9.31 million tons of wheat in 2022/23 compared to the record 11.15 million tons of the 2021/22 season. In Serbia, where the wheat harvest is coming to an end, the yield will decrease to 4.5 t/ha, which is 30% lower than the 10-year average, due to drought and limited use of fertilizers that have sharply increased in price. Throughout Europe, dry and hot weather will prevail for 10 days, which will negatively affect the development of crops of late grain and oil crops.

MercoPress reports a slight delay in wheat planting in Paraguay and Argentina in 2022/23 MR due to lack of rainfall and early frosts.

Dry and hot weather persists in most of the Southern Plains in wheat-growing regions. According to the US Drought Monitor, more than half of the region is experiencing severe, extreme or extreme drought, and the next 14 days will remain unchanged with limited precipitation. At the same time, in the Midwest, in soybean and corn growing areas, the percentage of drought for the week doubled to 15%.

According to DTN Ag Weather, the Midwest will experience localized, moderate to heavy rain over the next 5 days, which will help pollinate corn and develop soybeans.

Harvesting of rape and early cereals has begun in Ukraine. However, a drop in temperature and prolonged rainfall next week will slow the harvest and may affect the quality of the wheat.

In the prairies of Canada, the weather favors the formation of the crop, but in the western and southern regions dry conditions persist.