Wheat prices rose slightly, offsetting the previous week’s decline

Source:  GrainTrade
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Last week, December wheat futures on global exchanges partially recovered from the previous week’s decline and rose, but remain low amid weak demand and lack of fundamental support factors.

Improved weather conditions in the Northern Hemisphere are helping the growth of winter wheat crops and reducing concerns about the fate of the future crop. In the USA, 90% of the planned areas are sown with winter wheat (89% on average over 5 years).

Traders believe that the new USDA report will not significantly change the wheat balance sheet.

The Buenos Aires Grain Exchange cut its forecast for wheat production in Argentina by 800,000 tons to 15.4 million tons, which is higher than the Rosario exchange’s estimate of 14.3 million tons, but below the USDA’s forecast of 16.5 million tons.

December futures for the week grew by 2-3.5%, in particular for yesterday:

  • by 0.5% to $211.6/t – for soft winter SRW wheat in Chicago (+3.6% for the week),
  • by 0.3% to $237.3/t – for hard winter HRW wheat in Kansas City (+2.5%).
  • by 1% to $267.8/t – for HRS durum wheat in Minneapolis (+2.8%).

At the same time, December wheat futures on the Paris Euronext fell by 0.5% to €232.25/t or $248.7/t (-0.2%).

Prices for European wheat remain under pressure from a significant supply of wheat from the Russian Federation, which, according to experts, will dominate the market until the end of the season.

In the EU, warm weather with abundant precipitation favors the sowing and development of winter wheat crops, and in Ukraine and the south of the Russian Federation, rains have improved the condition of crops after a dry September.

As of October 29, wheat exports from the EU decreased by 24% compared to the previous season to 9.86 million tons, while imports increased by 54% to 4.05 million tons.

The Ministry of Agrarian Policy of Ukraine predicts that 4.36 million hectares will be sown with winter wheat (4.46 million hectares in 2022). So far, it has sown 89% of the plan or 3.87 million hectares, and warm weather will allow the work to continue next week.

According to the Australian Bureau of Statistics (ABS), in FY 2022/23 the country exported a record 31.67 million tonnes of wheat (2.34 million tonnes in containers and 29.31 million tonnes in bulk), surpassing the previous record in FY 2021/22 of 27, 6 million tons. Almost 7.56 million tons of wheat were purchased by China, 4.88 million tons by Indonesia, and 2.96 million tons by the Philippines. A decrease in the forecast of wheat production in Australia compared to the previous season from 37 to 24.5 million tons, and exports – from 32 to 17.5 million tons will support the wheat market in the second half of the season.

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