Late afternoon last Friday, the United States Department of Agriculture (USDA) published a wealth of data for world and US grains, leaving the potential for price volatility to follow.
The January World Agricultural Supply and Demand Estimates (WASDE) report was accompanied by US 1st December stocks and the USDA's first look at the US winter wheat planted area.
Wheat futures rallied through the Christmas holiday, driven higher by speculative short covering. The weakening Euro in foreign exchange markets, coupled with concerns for future Russian export volumes and their new crop production potential, drove the Paris market to its highest since 18th October last year. Subsequently, a lack of fresh export business and poor EU wheat export sales have galvanised selling interest and prices have eased.
The United States Department of Agriculture (USDA) published its December World Agricultural Supply and Demand Estimates (WASDE) report earlier this week, but with minimal changes for the world's wheat balance sheet.
Compared to last month, the USDA found an additional one-million-tonne carry in from last season and see small production cuts for Canada which is down 40,000 tonnes in line with Statistics Canada (StatsCan). The EU is also down 1.3 million tonnes and Brazil is down 400,000 tonnes.
Last Wednesday saw London May wheat futures close at £192.95/t. Prices firmed slightly to £194.40/t before easing back to £193.34/t on Friday's close. Markets opened £3.05/t down on Monday at £190.40/t and haven't moved much since.
MATIF followed a similar pattern with its May '25 contract closing at €235.00/t on Friday, before trading €6.25/t down at one point on Monday to €228.75/t.
The beginning of the week saw wheat futures markets extend their losses, with London wheat futures losing almost 8% of their value since the peak on 3rd October. Improving wheat crop prospects for Argentina this season, as well as for the EU and UK in 2025, encouraged the selling.
The Rosario Grains Exchange raised its Argentina wheat production estimate to 19.5 million tonnes following recent rains. It also raised the wheat export estimate to 13.3 million tonnes, which if achieved would be the second highest ever. Crop ratings for Argentinian wheat increased from 31% to 38%, 'good/excellent'.
You can also listen to the Frontrunner podcast - press play to hear the latest report. The report this week is read by marketing assistant, Becca Russell.
Geopolitical issues triggered spells of speculative short covering in futures markets this week. Trader concerns over the wider repercussions of a potential retaliation by Israel against Iran increased crude oil prices by over 3% on Monday to over $80/t, its highest since 19th July. This had a positive impact on other commodity markets, including wheat.
Away from the tensions in the Middle East, Russian missile strikes on two Ukrainian Black Sea ports, including Odessa, resulted in damage to grain carrying vessels - another reminder of the potential risk around shipping from the world's cheapest wheat source.
You can also listen to the Frontrunner podcast - press play to hear the latest report. The report this week is read by marketing assistant, Becca Russell.
Further speculative fund short covering helped wheat prices move higher earlier this week. London wheat futures recovered £3 from last week's low, although further gains to match other wheat futures markets were capped by another spell of sterling strength. The pound reached its highest level against the euro and the US dollar since April 2022, with investors attracted by the Bank of England leaving the UK base rate unchanged as the Federal Reserve cut US interest rates by 0.5%.
You can also listen to the Frontrunner podcast - press play to hear the latest report. The report this week is read by agronomist, Alex Pope.
Wheat futures prices have stabilised over the past week, sitting approximately 7% above their August lows. There is an increasing number of supporting elements to hold prices up, but nothing sufficient enough to move them on to another level yet.
Strong Russian and Ukraine exports dominate world trade and spot Russian wheat offers remain anchored at about $218/t FOB, failing to follow outside markets higher. The lack of rain and low soil moisture for drilling crop '25 is an additional watch for an extensive area covering Eastern Ukraine, Russia and Kazakhstan. Russian winter drilling is reported to be at its slowest pace since 2013 because of the dryness. According to the Ukraine Ministry of Agrarian Policy and Food, just 2% of Ukraine winter wheat area is planted due to record high temperatures and dryness.
You can also listen to the Frontrunner podcast - press play to hear the latest report. The report this week is read by agronomist, Alex Pope.
Wheat markets have enjoyed a buoyant start to September. Just three days into the new month Paris futures topped a 9% price gain from their contract lows seen trading during the last week of August. With the US and EU harvests nearing completion and harvest farm selling pressure drying up, trade liquidity has become an issue at the lower price levels. Speculative short covering has provided buying interest, although the primary negative wheat price driver remains in play.
You can also listen to the Frontrunner podcast - press play to hear the latest report. The report this week is read by marketing assistant, Becca Russell.
On Monday this week the United States Department of Agriculture (USDA) published its August World Agricultural Supply Demands Estimate (WASDE). Traders expected to see a slight increase in US wheat production, but despite seeing a higher yield, the USDA also saw a smaller harvested area. This left US wheat production dropping from the previous estimate of 54.66 million tonnes to 53.93 million tonnes.
You can also listen to the Frontrunner podcast - press play to hear the latest report. The report this week is read by farm trader, Lucinda Redgate.
Improving production prospects for US wheat and corn has encouraged speculative funds to build near record short positions in Chicago Board of Trade (CBOT) futures, sending markets to contract lows at the end of July. The subsequent weakness in the US dollar – which has enabled US grains to be more competitive in export markets - has allowed for a modest wheat price recovery, but strong crop ratings temper any notable buying enthusiasm.
You can also listen to the Frontrunner podcast - press play to hear the latest report. The report this week is read by marketing assistant, Becca Russell.
Up until Wednesday, the past week has seen the bears take control of the market.
London wheat futures for the November contract opened at £195.75/t last Thursday before shedding £8.50/t to a low of £187.25/t on Tuesday – they recovered by close of play Wednesday.
Paris wheat futures for the December contract followed a similar pattern. They opened at €231.25/t last Thursday, then dropped by €9.75/t to a low of €221.50/t and recovered on Wednesday by closing at €227.50/t.
You can also listen to the Frontrunner podcast - press play to hear the latest report. The week's report is read by agronomist, Alex Pope.
Reports of poor quality and plunging crop ratings triggered a sharp price rally for wheat futures markets earlier this week, as the French wheat harvest progressed northwards. Paris wheat futures found strength, adding 12 euros from its recent low last week.
You can also listen to the Frontrunner podcast - press play to hear the latest report. The report this week is read by farm trader, Lucinda Redgate.
Wheat futures markets have continued to fall as crop concerns ease and demand remains uncertain. Speculative managed funds trading the US Chicago Board of Trade (CBOT) wheat market were sellers again on Tuesday for the seventeenth time in the last 19 trading days. This has left the December CBOT position at its lowest since 15th March 2024 and just 16 cents away from the lowest point so far this year.
You can also listen to the Frontrunner podcast - press play to hear the latest report. The report this week is read by agronomist, Alex Pope.
Chicago Board of Trade (CBOT) wheat futures continued to fall sharply this week, only pausing mid-week when US markets closed for a public holiday. By end-of-trade on Tuesday, the December 2024 position had fallen to its lowest since 22nd April, marking an 18% fall in value from the recent peak on 28th May.
You can also listen to the Frontrunner podcast - press play to hear the latest report. The report this week is read by marketing assistant, Becca Russell.
Global wheat markets continued to fall earlier in the week. US Chicago Board of Trade (CBOT) wheat futures dropped for the ninth consecutive day on Monday, reaching their lowest levels since early May and marking a 14% decline in value since the recent peak at the end of May.
You can also listen to the Frontrunner podcast - press play to hear the latest report. The report this week is read by farm trader, Lucinda Redgate.
French 2024 wheat futures have hit their highest levels since November 2022, driven by further downgrades in Russia's 2024 wheat harvest potential.
While UK and US markets observed a public holiday on Monday, the Paris market surged by nearly 3%. The Russian Grain Union reported frost damage which affected potentially two million hectares. The Institute for Agricultural Market Studies, IKAR, further reduced its Russian wheat production estimate to 81.5 million tonnes, down from 83.5 million tonnes.
You can also listen to the Frontrunner podcast - press play to hear the latest report. The report this week is read by marketing assistant, Becca Russell.
Further cuts to Russian 2024 wheat production estimates and concerns for Ukraine output have reignited speculative buying interest, sending futures markets higher and setting new recent highs. Chicago Board of Trade (CBOT) wheat rose to its highest since August 2023 and French wheat futures to their highest since February 2023, whilst London futures struggled to match the pace as sterling continued to appreciate versus the euro.
You can also listen to the Frontrunner podcast - press play to hear the latest report. The report this week is read by farm trader, Lucinda Redgate.
Last Friday, the United States Department of Agriculture (USDA) published its first grain balance sheet estimates for next season.
World wheat production is seen higher by 10.5 million tonnes on the year to a total of 798.19 million tonnes, but corn will be lower by eight million tonnes to a total of 1.22 billion tonnes. Increases in consumption for both wheat and corn see stocks falling by 4.2 million tonnes and 800,000 tonnes respectively by the end of next season.
You can also listen to the Frontrunner podcast - press play to hear the latest report. The report this week is read by agronomist, Alex Pope.
After a sluggish start to the year, wheat prices experienced a remarkable turnaround in the last days of April, surging to multi-month highs. Speculative funds, which had previously driven prices lower by building record short positions in wheat futures markets, reversed their stance.
You can also listen to the Frontrunner podcast - press play to hear the latest report. The report this week is read by Marketing Assistant, Becca Russell.
