USDA has raised estimates of world production and wheat stocks, which has increased pressure on prices

The war in Ukraine remains a major factor in the impact on world wheat prices, as analysts do not understand when Russia will stop the attack and to what extent grain exports from major wheat-exporting countries will be able to resume.

Fighting in southern, eastern and western Ukraine has prevented farmers from sowing, and sanctions against Russia will lead to a economic downturn and a disruption of the sowing campaign, as most sunflower and corn seeds are imported.

In a March report, USDA experts raised their forecast for world wheat production and stocks, and finally raised yield estimates for Australia, according to local agencies.

Compared to February estimates, the new balance of wheat for 2021/22 MY has undergone the following changes:

• The estimate of initial stocks was increased to 290.27 million tons (296.83 million tons in 2020/21 MY and 280.7 million tons in 2019/20 MY) due to the revision of production and consumption data in 2020/21 MY.
• The forecast of world production increased by 2.1 million tons to 778.52 million tons (776 million tons in 2020/21 MY and 763.5 million tons in 2019/20 MY), in particular for Australia - by 2.3 million tons to 36 .6 (34; 33.3) million tons and the EU - by 0.1 million tons to 139 (138.9; 134.2) million tons, while for Russia it was reduced by 0.34 million tons to 75.1 (75.5; 85.3) million tons. For Argentina, the production forecast was left at 20.5 million tons (17.65 million tons in 2020/21 MY), although local analysts estimate it at 21-22.1 million tons .
• The forecast of world consumption was reduced by 0.8 million tons to 787.28 million tons (782.5 million tons in 2020/21 MY and 748.33 million tons in 2019/20 MY) due to the reduction of its consumption in Australia for feed by 0, 5 million tons
• The estimate of world exports against the background of Russia's war against Ukraine was reduced by 3.6 million tons to 203.11 million tons (202.6 million tons in 2020/21 MY), in particular for Ukraine - by 4 million tons to 20 (16.8 ) million tons, Russia - by 3 million tons to 32 (39.1) million tons, the United States - by 0.3 million tons to 21.77 (26.7) million tons. At the same time increased estimates for Australia by 2 million tons to 27.5 (19.7) million tons, Brazil - by 0.2 million tons to 1.7 (0.9) million tons, India - by 1.5 million tons to 8.5 (3.5) million tons .
• The estimate of imports was reduced by 3.49 million tons to 201.27 million tons (194.18 million tons in 2020/21 MY).
• The forecast of the world's final stocks against the background of increased production and reduced consumption increased by 3.3 million tons to 281.51 million tons (290.27 million tons in 2020/21 MY and 299.22 million tons in 2019/20 MY), in particular for Ukraine - by 3 million tons and Russia - by 2.46 million tons, as their exports will stop indefinitely.

May futures in the US collapsed yesterday:

• 11.7% or $ 42.07 / t to $ 399.4 / t for soft winter SRW wheat in Chicago,
• 4.8% or $ 17.91 / t to $ 391.6 / t for winter winter HRW wheat in Kansas City,
• 2.8% or $ 10.66 / t to $ 387.6 / t for durum HRS wheat in Minneapolis,
• $ 3.25 / t to $ 404 / t for Black Sea wheat in Chicago.

March futures for European wheat on Paris' Euronext fell by € 27.5 / t to € 395 / t against the end of their contracts yesterday, although they recently reached a record € 422.5 / t, but May futures fell only by 4 € / t to 368.25 € / t or 405 $ / t, losing 7.7% of the price since the beginning of the week.