Despite the latest USDA’s supply and demand report drastically reducing Russian, Ukraine and EU wheat production estimates, the latest AHDB Grain Market Report shows a further decline in grain prices.
Prices fell steadily during the week of the Cereals event, and the Nov-24 UK feed wheat futures stand at £205.75/t. The May-25 contract also fell from its opening price to end at £212.90/t.
THE USDA report predicts the global wheat outlook to have a tighter balance next year (2024/25), largely as a result of the smaller supply. The cuts to Russia, Ukraine, and EU production outweighing the modest increase in global opening stockings. The hot and dry weather followed by the frosts during May in Russia resulted in the wheat crop being cut from 88.0 Mt in May to 83.0 Mt. This drops closer to forecasts by IKAR and SovEcon of 81.5 Mt and 80.7 Mt respectively.
Despite a modest rise of production in the US (+0.5 Mt) and decrease in global feed demand, the substantial drop of production across key producing regions tightens the global wheat balance for 2024/25 from May’s estimate.
Looking ahead
On June 28, the USDA is due to release its acreage report, which will provide survey-based indications of planted and harvested area. The upcoming weather will continue to be influential regarding the condition of the US soyabean and maize crop. Both of these are scoring substantially better than this time last year at 74% and 72% good-to-excellent condition respectively. Also, as wheat harvesting progresses across the Northern Hemisphere subsequent yield and quality news will offer further direction for global wheat markets.
The USDA report also helped push oilseed prices down. The Paris rapeseed futures (Nov-24) contract dropped during the same periof, currently standing at €473.50/t.
LSEG held its 2024/25 EU rapeseed production estimate unchanged at 20.4 Mt despite the mixed weather patterns across many European areas. This comes after COCERAL and the Ministry of Agriculture in France both downgraded their 2024 rapeseed production forecasts.
