Despite the decrease in the forecast for the harvest in Canada, wheat prices fell by 1.3-3.3%

Canada's wheat harvest forecast has been cut more than analysts expected, but despite this, wheat prices on world exchanges fell another 1.3-3.3% yesterday, confirming that the markets are going against logic. The reason for the drop was the better-than-expected state of spring wheat crops in the USA and the confirmation of a high harvest in the Russian Federation.

StatCan experts predict that wheat production in FY 2023/24 will decrease compared to the previous season by 14.2% from 33.82 to 29.5 million tons, which will be the second lowest figure in the last 8 years. At the same time, the USDA in August estimated the harvest at 33 million tons, and the analysts polled by Reuters - at 30.4 million tons. Despite the increase in the area sown by 5.6% from 24.9 to 26.3 million acres, the low yield will lead to a reduction in production, especially spring wheat, the harvest of which will decrease by 14.5% to 22.1 million tons, while the durum wheat harvest will decrease by 26% to 4.3 million tons.

After the heat wave that hit the US last week, the USDA downgraded the crop estimate by only 1%, although the market had expected a worse crop condition and lower yield potential.

Yesterday, September futures fell:

• by 3.3% to $209.3/t - for soft winter SRW wheat in Chicago,
• by 3.3% to $262.5/t - for hard winter HRW wheat in Kansas City,
• by 1.3% to $277.7/t - for hard spring HRS-wheat in Minneapolis,
• by 1.6% to €225.25/t or $244.8/t - for wheat on the Paris Euronext.

On August 28, 73.8 million tons of wheat were threshed from 65% of the area in the Russian Federation, which confirms the realism of forecasts of 86-88 million tons, even despite the decrease in spring wheat yields in the east of the country due to dry weather. This also increases the pressure on quotations.

The Egyptian GASC held negotiations with traders on the purchase of wheat directly without an international tender. The cheapest was the offer from Buildcom for the supply of 50,000 tons of Bulgarian wheat on October 5-20 at a price of $263.77/ton FOB. In addition, ADM offered 60 thousand tons of Romanian wheat for delivery from August 26 to September 6 at a price of $264/t FOB. Several operators offered 15 lots of Russian wheat at $265/t FOB, reflecting the authorities' minimum export sales price of $265/t FOB for direct contracts and $270/t FOB for tenders.

Ukraine is discussing plans to reduce the area of wheat sown for the 2024 harvest against the background of difficulties with implementation and low prices, while the area under winter rapeseed is planned to increase by 30%.