Wheat prices fell for the week, but traders are worried about a possible reduction in production next season

Despite the significant global supply of wheat in 2022/23 MR, traders are paying more and more attention to forecasts of a reduction in production in the next season in Australia and the Black Sea countries, as well as closely monitoring the weather conditions in the main world exporters - the USA and the EU.

Wheat prices fell last week, completely losing the speculative rally of the previous week, triggered by forecasts of severe frosts in the US.

Monday was a holiday in the USA, and on Tuesday stock market quotations decreased:

• by 2% or $5.1/t to $275.8/t - March futures for soft winter SRW wheat in Chicago (-5.5% for the week),
• by 0.2% or $0.82/t to $332.3/t - March futures for HRW hard winter wheat in Kansas City (-0.8%).
• by 0.6% or $2.11/t to $339.7/t - March futures for HRS durum wheat in Minneapolis (-0.6%).
• by 0.4% or $1.25/t to $302/t - March futures for Black Sea wheat in Chicago (-0.7%).
• by €7.5/t to €287/t or $305.9/t - March wheat futures on Paris Euronext (-4%).

Low export rates from the USA are putting pressure on prices. According to the MSG of the USA, during the week of February 10-16, wheat exports decreased by 27% to 373.4 thousand tons, and in general in the season reached 14.66 million tons, which is 2.9% lower than last year's pace.

In order to lower prices, the Indian government will supply another 2 million tons of wheat from reserves to the domestic market in addition to the 3 million tons already sold this year. According to the meteorological department of the country, in some northwestern states, due to the lack of seasonal winter rains, temperatures this week reached 39 ^o C, which was 9 degrees above the norm. We will remind that last year wheat production in India decreased due to the heat to 104 million tons, but this year the harvest is forecast at the level of 112 million tons.

The European monitoring agency MARS reported that rainfall in Spain and Portugal was 20% of normal in February, and France - 50%.

The agency Rusagrotrans reduced the forecast of wheat production in the Russian Federation in 2023 by 1.8 million tons to 79.7 million tons (104 million tons in 2022) as a result of a greater than previously thought loss of part of the winter crop in the central regions.

The state agencies of Turkey and Egypt will hold tenders for the purchase of wheat this week, which indicates the intentions of importers to intensify purchases.