As anticipation builds around the USDA’s March report, wheat prices on global exchanges have continued their downward trend. This decline comes despite forecasts indicating a reduction in wheat production for the new season and dwindling ending stocks at a 10-year low.
Crop Conditions in the US
The latest weekly report from NASS USDA highlights a concerning deterioration in winter wheat crops across key states. In Texas, crops rated as good or excellent decreased by 3% to 43%, while Oklahoma saw a 5% decline to 65%, and Kansas experienced a 4% drop to 53%.
Concerns Over Export Pace
Traders are particularly worried about the sluggish pace of wheat exports from the USA, which plummeted by 36% to 353.2 thousand tons in a single week. Total exports for the season now stand at 12.97 million tons, marking a significant 21% decrease compared to last year’s figures.
Futures Market Movement
Yesterday, May wheat futures witnessed declines across major exchanges:
- Soft winter SRW wheat in Chicago fell by 2.4% to $202.5/t
- Hard winter HRW wheat in Kansas City dropped by 2% to $209.2/t
- HRS durum spring wheat in Minneapolis decreased by 0.6% to $240.9/t
- Wheat on the Paris Euronext experienced a 1.6% decline to €190.25/t or $206.4
Export Trends
In the current season, EU countries have exported 20.98 million tons of wheat, showing a marginal 2% decrease compared to last year. However, reaching the USDA forecast of 36.5 million tons seems unlikely.
Record Exports from Russia
Russia has recorded an unprecedented export of 35.8 million tons of wheat in the current season. This surge in exports, fueled by diversification of supplies and increased shipments to various countries, has contributed to a significant drop in world prices.
Outlook and Forecasts
Analysts anticipate a further reduction in the USDA’s estimate of final wheat stocks for the 2023/24 marketing year by 1.3 million tons to 258 million tons. With projected decreases in production across the EU, USA, and North Africa due to unfavorable weather and reduced sowing areas, price dynamics may shift during the upcoming harvest period.
Source:Graintrade