Wheat futures at the end of 2022 exceeded the level of the previous year by 3.5-24%

U.S. wheat futures ended last week and the year with modest gains, fueled by speculative buying, and widened the gap from a year ago.

So, on December 31, they rose in price:

• by 2.3% or $6.61/t to $291/t - March futures for soft winter SRW wheat in Chicago (+3.5% for the year),
• by 2.5% or $7.9/t to $326.3/t - March futures for hard winter HRW wheat in Kansas City (+11% for the year),
• by 2.7% or $9.09/t to $344.9/t - March futures for HRS durum wheat in Minneapolis (+6% for the year).

At the same time, January futures for Black Sea wheat in Chicago remained at the level of $308.25/t, which almost corresponds to last year's level.

March wheat futures on the Paris Euronext ended the year at €309.25/t or $329.8/t (+24% for the year).

Data on the decrease in wheat production in Argentina put pressure on the market. According to the BAGE exchange, in 2022/23 MR, 9.3 million tons of wheat were threshed from 91.4% of the areas with a yield of 2.23 tons/ha. The Rosario Grain Exchange cut its wheat crop forecast by 2.5% to 11.5mt due to the drought, while WASDE in December estimated it at 12.5mt, compared to 22.15mt in FY2021/22. Argentina will reduce wheat exports in 2022/23 compared to the previous season from 15.3 to 6 million tons, which will be an 8-year low.

Brazil, which is the main importer of Argentine wheat, has been harvesting a record wheat crop for the second year running. According to Conab, in 2022 production increased by 24% compared to the previous year to 9.5 million tons, in particular in the states of Paraná and Rio Grande do Sul (where 86% of wheat is grown) by 9% to 3.5 million tons and by 36% to 4.7 million tons, respectively. It is expected that, against the background of a record harvest, the farmers of these states will continue to increase the area of wheat sowing in the next season.

According to FAS USDA data, for the week of December 16-22, export sales of wheat from the United States increased by 43% to 478 thousand tons, and in general in the season reached 14.922 million tons, which is 6% lower than last year's pace.