Lower corn prices have increased pressure on wheat prices

Rumors about the US government's intentions to change its policy on the biofuel industry yesterday brought down the prices of corn and soybeans on the Chicago Stock Exchange, which increased pressure on the wheat market, which at the same time received support from data on the deterioration of crops in the United States.

At the beginning of the session, wheat prices fell on data on wheat exports from the United States, which for the first 10 days of the 2021/22 season amounted to 673.3 thousand tons, which is 16% lower than last year's figure.

After the end of trading, the NASS USDA report was released, according to which the number of winter wheat crops in the United States in good or excellent condition decreased for the week by another 2% to 48% compared to 50% last year, and spring wheat – by 1% to 37% compared to 81% last year due to the deterioration of crops in Washington and North and South Dakota. At the same time, winter wheat was harvested only on 4% of the area, compared to 15% on average for 5 years.

July US futures fell:

• by 2 2.30 / ton to Чикаго 247.83/ton for soft winter SRW wheat in Chicago,
• by 3 3.67 / ton to H 230.75/ton for hard winter HRW wheat in Kansas City,
• by 6 6.71/ton to.274.29 / ton for hard spring HRS wheat in Minneapolis.

In Europe, favorable weather improves the prospects for the future harvest, which will exceed not only last year's, but also the annual average. FranceAgriMer estimates that the number of wheat crops in France in good or excellent condition for the week increased by 1% to 81% compared to last year's 56%.

Wheat exports from the EU for the week decreased to 95.5 thousand tons, and in general in the season amounted to 24.9 million tons, which is 27% lower than last year's pace. It is unlikely that by July 1 it will be possible to reach the projected USDA 30 million tons, so transitional reserves in the EU will grow in the new season.

• September wheat flour futures for MATIF fell by €2.25/ton to €209/ton or.254.3 / ton.

Under the pressure of precipitation forecasts and improved harvest prospects, July Black Sea wheat futures fell by 6 6.75/ton to.250.75/ton, and December – by. 4.75/ton to. 263/ton.

Individual processors buy wheat at 7000 UAH/ton with delivery to the mill, and feed mills that replace expensive corn with wheat are willing to pay up to 7300 UAH / ton.

On June 16, Egypt's GASC will hold a tender for the purchase of an arbitrary amount of flour-milling wheat for delivery on August 21-31, 2021, which will become a new price indicator for Black Sea wheat of the new crop this week.