Wheat Prices Rally as EU Crop Forecasts Decline

Wheat prices experienced a notable uptick this week, rising by 1.4-2.3% amid downward revisions in crop forecasts within the EU. Despite prevailing challenges such as sluggish demand and ample stockpiles, active futures trading and reduced EU crop projections provided support, reversing previous declines of 5-6%.

EU Crop Forecasts Adjusted

Analysts at Refinitiv Commodities Research have revised their soft wheat production forecast for the EU in the 2024/25 marketing year, lowering it by 1.3 to 123.2 million tons compared to last year’s 125.8 million tons. Similarly, durum wheat forecasts have been adjusted downward by 0.2 to 7.5 million tons. These revisions stem from reduced official estimates of wheat planting areas in France.

 Improved Conditions and Market Reactions:

Enhanced precipitation levels across much of Europe have bolstered soil moisture and improved prospects for the upcoming wheat harvest. Nevertheless, on Friday, March wheat futures exhibited mixed movements:

• Soft winter SRW wheat in Chicago decreased by 1.7% to $210.7/t (-2.3% for the week).
• HRW hard winter wheat in Kansas City declined by 0.9% to $209/t (+0.3% for the week).
• Hard spring HRS-wheat in Minneapolis fell by 1.5% to $235.7/t (+2% for the week).
• Wheat futures on the Paris Euronext dropped by 0.7% to €206/t or $222.8/t (+1.4% for the week).

Market Influences and Price Trends

Anticipated rainfall across winter wheat regions in the US and the EU continues to weigh on prices. Meanwhile, expectations of an improvement in the US wheat crop’s condition are likely with today’s USDA report. On the physical market, prices are declining, driven by a 12.5% drop in Russian wheat prices and decreased government intervention in price control.

 International Tender Dynamics

In Bangladesh, the Directorate of Food Products (DGF) has closed applications for an international tender to purchase 50 thousand tons of milled wheat of unspecified origin. The tender attracted offers from various companies:

As market dynamics continue to evolve, stakeholders are closely monitoring global weather patterns, geopolitical developments, and trade negotiations to assess their impact on wheat prices and market stability.

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