The decline in spring wheat prices was a signal for a market reversal
Uncertainty is growing on global markets with wheat price trends amid possible crop problems in the United States, Canada and Russia, as well as a possible reduction in exports by major producing countries.
In Chicago, soft wheat is getting more expensive for the 6th consecutive session, closing the gap from spring wheat, which rose rapidly earlier. At the same time, durum spring wheat prices in Minneapolis are falling for the second day in a row amid rain in North and South Dakota, although dry and hot weather will prevail there until the end of July.
September US futures rose:
- by 3 3.77 / ton to Чикаго 261.15/ton for soft winter SRW wheat in Chicago,
- by 3 3.12/ton to.245.72 / ton for hard winter HRW wheat in Kansas City.
Hard spring HRS wheat in Minneapolis fell by 6 6.71/ton to 3 329.86/ton.
Rains delay wheat harvesting in Europe. Now it is threshed only on 4% of the area compared to 42% last year, but next week dry and hot weather will speed up harvesting.
French wheat turned down after reaching a 2-month high yesterday. Traders believe that the slower growth of prices for Russian wheat than for French wheat indicates the low competitiveness of the latter.
According to the results of 12 working days in July, France ranks only 3rd in terms of soft wheat exports among EU countries. In total, in my 2021/22, the European Union exported 371,131 thousand tons of soft wheat, which is 53.35 lower than last year's pace. The main exporters are Romania (23%), Bulgaria (18.3%), and only then France (16.5%).
- September wheat flour futures for MATIF fell by €1.75/ton to €213.75/ton or € 252.15 / ton.
Despite the increase in wheat supplies, buyers are in no hurry to step up their purchases.
The State Trade Corporation of Iran (GTC) did not sign a single contract at the tender for the purchase of 60 thousand tons of flour – milling wheat of any origin for delivery in August-September.
Thailand also refused to buy 138 thousand tons of feed wheat at the tender for delivery in October – December due to high offer prices of 3 308-318/ton C&F.
As of July 21, 26.8 million tons of wheat with a yield of 3.47 t/ha were threshed in Russia from 7.7 million hectares (last year 29.3 million tons were harvested with a yield of 3.49 t/ha).
August Black Sea wheat futures on the Chicago Stock Exchange yesterday fell by 1 1.5/ton to 2 251.5/ton, while December futures remained at.267/ton.
The volume of supply of Black Sea wheat exceeds demand, so supply prices are decreasing and for deliveries in August – September they amount to 2 242-250/ton FOB. Offer prices for European wheat remain at F 240-255/ton FOB, which limits the rise in the price of Black Sea wheat.