Improvements in U.S. crops and faster harvests in Australia and Argentina add pressure on wheat prices

Wheat quotations on world exchanges rose last week after the Russian intercontinental ballistic missile attack on a plant in the Dnipro region, increased missile attacks in Ukraine and a possible escalation in the Black Sea region. But prices eased again yesterday thanks to improved US crop conditions and the start of harvests in Australia and Argentina, and are now trading at 4-year lows.

According to NASS USDA's Crop Progress, as of November 24, 97% of U.S. winter wheat acreage was planted (5-year average of 98%), and the number of crops in good or excellent condition for the week increased by 6% to 55% (50% last year ). The export of wheat from the USA increased by 83% to 360.5 thousand tons during the week, and in general in the season reached 10.69 million tons, which is 31.15% ahead of last year's pace.

The European wheat market supported the forecast of a significant increase in winter wheat sowing areas, 88% of which are in good condition (83% last year).

Yesterday, December futures fell, completely losing the previous week's gains:

• by 1.6% to $196.85/t – for soft winter SRW wheat in Chicago (-2.2% for the week),
• by 1.4% to $200.8/t – for hard winter HRW wheat in Kansas City (-1.6%).
• by 0.9% to $213.5/t - for hard spring HRS-wheat in Minneapolis (-0.7%).
• by 2.2% to €214.25/t or $224.5/t - wheat futures on Paris Euronext (-1.8%).

In Ukraine, export demand prices remain at the level of 9700-10000 UAH/t or 209-212 $/t for food and 9400-9450 UAH/t or 202-204 $/t for fodder wheat with delivery to Black Sea ports. At the same time, demand prices for food wheat for delivery to the port of Constanta fell by $4-5/t to $222-224/t during the week due to the decline in the euro and exchange quotes.

Export asking prices for Russian 12.5% protein wheat for November-December delivery are $226/t FOB, while French wheat is at $238/t and US wheat at $249/t.

On November 25, the Bangladesh Food Directorate finished accepting applications for participation in the tender for the purchase of 50,000 tons of flour milled wheat of longitudinal origin, Reuters reports. The lowest price was offered by the Australian company Agrocorp - $286.08/t CIF liner out. In addition, Cereal Crop is offering wheat at $299.95/t CIF free out, and Aston is offering Russian wheat at $294.13/t CIF free out.

Last week, IGC experts reduced the forecast of world wheat production in 2024/25 MR by 2 million tons to 796 million tons due to the decrease in the harvest in the EU.

In the near term, the wheat markets will be influenced by the harvest data in Australia and Argentina and the activation of demand in those directions, so the Black Sea wheat market will remain stable.