Record Wheat Yields in North Dakota
The Wheat Quality Council’s recent crop tour, concluding on July 25, reported significant yield increases in North Dakota. The average yield for all wheat varieties is projected to reach 3.62 tons per hectare, up from 3.17 tons per hectare in 2023. Hard red HRS wheat is expected to achieve a record yield of 3.66 tons per hectare, compared to 3.19 tons per hectare last year.
Impact on Wheat Prices
These robust yields have contributed to a drop in wheat prices across major markets. In Chicago, wheat prices fell to their lowest levels since July 2020. Similarly, prices in Kansas and Minneapolis reached their lowest since December 2020.
- September wheat futures in Chicago for soft winter SRW wheat fell by 2.8% to $192.35 per ton, marking a 12.6% decline for the month.
- In Kansas City, HRW hard winter wheat prices dropped by 3% to $200.44 per ton, a 9.9% decrease.
- Minneapolis saw a 2.7% decline in hard spring HRS wheat prices to $216.24 per ton, although this represented a 7.2% increase for the month.
- European wheat prices on the Paris Euronext fell by 1.1% to €217.25 per ton, or $235.95 per ton, down 3.6%.
European Wheat Market Trends
European wheat prices have decreased to their lowest level since April 2024, influenced by forecasts of reduced harvests in the EU and Ukraine. However, these prices were somewhat bolstered by predictions of increased imports by African nations. The European Commission has revised its forecast for EU soft wheat production in the 2024/25 marketing year to 120.8 million tons, a 4% drop from the previous year’s harvest.
In France, the condition of soft wheat crops rated as good or excellent has fallen by 2% to 50%. Harvesting progress has reached 41% of the area, a 27% increase for the week, but is slower than average due to prolonged rains affecting grain quality.
Global Wheat Import and Harvest Forecasts
The USDA predicts a 15% increase in wheat imports by Morocco for the 2024/25 season, totaling 7.5 million tons. This figure is 39% higher than the five-year average, driven by a 43% decline in domestic production to 3.1 million tons due to drought.
In Russia, the SovEkon agency has raised its wheat harvest forecast by 0.5 million tons to 84.7 million tons, citing favorable weather conditions for spring wheat.
Weather Challenges in Eastern Europe and Central Asia
Dry weather in eastern Ukraine, Russia, and western Kazakhstan is reducing winter wheat harvest prospects. Without substantial rainfall in eastern Russia soon, spring wheat production is also expected to decline significantly.
The high harvesting rates and yields in the US are placing downward pressure on global wheat prices, particularly as Canadian and Russian forecasts predict strong harvests. This market reaction highlights the sensitivity of commodity prices to production reports and forecasts, reflecting the interconnected nature of global agriculture markets. Moving forward, weather patterns and geopolitical factors will continue to play a crucial role in shaping wheat prices and availability.