What's moving wheat markets this week? Grain market daily

• Yesterday, the Nov-24 UK feed wheat futures sustained the gains from Monday. The contract closed at £199.50/t, up slightly (£0.20/t) from Monday’s close. However, the new crop (May-25) contract fell £0.25/t to £207.35/t over the same period.
• Despite some domestic gains, global wheat futures were generally pressured yesterday. Profit-taking by speculative traders, falling Russian export prices and a rapidly progressing US winter wheat harvest all weighed on markets.
• Paris rapeseed futures (Nov-24) rose €5.00/t yesterday, ending the session at €501.00/t.
• European rapeseed prices followed the wider oilseeds complex up yesterday. Chicago soyabeans (Nov-24) rose 0.18% yesterday on technical trading and adverse weather in some soybean growing areas of the central US. LSEG reported that China is likely to import record volumes of soybeans in July, driven by lower prices and the prospect of increased US tariffs if we see a change in US presidency.

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After several weeks of decline, global wheat futures have rebounded slightly this week. The markets gained support from uncertainty surrounding the Russian crop, increased demand for US wheat, and a slight decline in the US winter wheat crop condition.

US wheat harvest progressing and export demand on the rise

The US wheat export campaign started slowly with only 1.36 Mt of shipments recorded in June. However, this pace is an improvement compared to last year's record low level. The USDA also forecasts a rise of 2.2 Mt in US wheat exports this year compared to last year due to higher production and a tighter global balance.

On Monday, the USDA reported that winter wheat harvest in the US is progressing quickly, at 54% complete as at week ending 30 June. This is a significant increase from last week’s 40% and well above the five-year average of 39% for this point in the season. Oklahoma has finished its harvest entirely, while Arkansas and Missouri have completed 94% and 92% respectively.

Further north, winter wheat harvest is yet to begin in Washington, Oregon, South Dakota, Montana and Idaho. The proportion of the wheat crop in good or excellent condition in this region has either remained stable or improved on the week.

Uncertainty over size of Russian crop continues

Uncertainty over the size of Russia's wheat crop spurred traders to cover their short positions earlier in the week which added support to the markets. The prolonged hot and dry weather in Russia reduced the expected output from the world's leading wheat exporter last week.

Russian consultancy, Sovecon revised its 2024/25 Russian wheat export forecast down to 46.1 Mt from 47.8 Mt, due to expectations of smaller crop. Earlier last month, the agency had lowered its 2024 Russian wheat production forecast to 80.7 Mt from 85.7 Mt, following damage caused by May frosts. However, this morning, Sovecon revised its forecast back up again, this time to 84.1 Mt. Any further adjustments to the export figure will be a watchpoint over the coming weeks.

Looking ahead

Concerns about the Russian crop and any changes to further estimates will remain a key watch point for wheat markets. Also, the warm and dry weather conditions in Ukraine will continue to be monitored, as any downward revisions contribute to the tighter global supply outlook. An uptick in global demand for US wheat could drive prices up, though the rapidly progressing US wheat harvest will likely cap any gains.

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