In the past week, wheat markets have had to, once again, accept price cuts. On the futures market in Paris, prices dropped by about 4%. Chicago lost just over 2% from the previous week’s close.
2 new reports from the USDA Department of Agriculture were primarily responsible for the decline in wheat prices. In 1 report, estimates were given for US winter wheat acreage for the 2022 harvest. According to preliminary figures, the acreage will increase by 2%. This shift is larger than analysts had previously expected. And is especially true for the cultivation of soft wheat.
At the same time, a new monthly report on the global estimate of grain supply and demand was also released. There were no major changes here compared to the December report. Wheat consumption figures were, however, revised downwards. Partly as a result of this, the expected closing stocks in June 2022 will increase.
There are also new expectations in Europe that are putting some pressure on price formation on the wheat market. FranceAgriMer lowered the export forecast for French wheat outside the EU to 9 million tonnes. In addition, this agency of the French Ministry of Agriculture thinks that the export of French wheat within the EU will also be slightly lower. As a result, inventories have increased slightly compared to the estimate in December last year.
In addition, the market consultancy, Strategy Grains, has lowered the export prospects for the EU as a whole. The agency is now targeting an export of 31.2 million tonnes of common wheat. Strong competition from Argentina and the cultivation areas around the Black Sea in the supply of African countries is cited as the reason. This mainly concerns the export of French wheat to Algeria. That country also launched another tender recently. Normally, Algeria buys wheat mainly from France, but the relationship between the 2 countries has become somewhat clouded in recent months.
In Russia, too, it is noticeable that the wheat market is cooling off somewhat. The indicative export prices showed an upward trend week after week. Until last week, when more than $ 1 per tonne was deducted from that price. As a result, the export duty also fell slightly for the first time since June last year to $ 97.50 per tonne.