Wheat prices rose in anticipation of a "bearish" report from the USDA

The market expects today's USDA wheat balance sheet, which may increase the global production forecast due to higher harvest estimates for the Russian Federation, as well as lower the global consumption forecast, which will increase ending stocks.

However, wheat quotes rose in line with corn prices, supported by a decline in the EU corn production forecast.

In the August report of Strategie Grains, the forecast for the production of soft wheat in the EU in 2022/23 MR remained at 123.3 million tons, but the forecast for its export was reduced by 1.4 million tons to 29 million tons, which will correspond to the level of the previous season. At the same time, due to the drought, the estimate of corn production in the EU was immediately reduced by 10 million tons to a 15-year low of 55.4 million tons, and the forecast for its import was increased by 3 million tons to 20 million tons, which will also increase the consumption of wheat for feed in the EU.

In the US, dry weather is expected in spring wheat growing regions in the next 7-10 days, which increases the pressure on spring wheat prices.

Wheat quotations on world exchanges rose yesterday:

• by 1.4% or $4.04/t to $297.9/t - September futures for soft winter SRW wheat in Chicago,
• by 1.2% or $3.86/t to $326.7/t - September HRW hard winter wheat futures in Kansas City,
• by 1.7% or $5.7/t to $338.7/t - September futures for HRS durum wheat in Minneapolis,
• by 0.4% or $1.25/t to $354.75/t - August futures for Black Sea wheat in Chicago,

At the same time, September wheat futures on the Paris Euronext fell by €2.5/t to €338/t or $348.3/t.

Rusagrotrans experts increased the forecast of wheat production in Russia from 94.1 to 6.1 million tons due to the good yield of winter wheat and favorable weather conditions for the development of spring wheat. While the USDA in July estimated the harvest at 81.5 million tons.

Low demand from importers for new-crop wheat will add pressure on prices in the near term, especially if USDA experts downgrade wheat consumption forecasts in importing countries with significant reserves.