Global wheat yields are strong, but prices remain under pressure due to limited storage and forced sales. Futures markets show mixed signals, with gains in Europe and the US offset by declines in Russia. Export forecasts and production updates add further complexity to the outlook.
Storage limits pressure prices
Although global wheat yields are high and forecasts continue to be revised upward, low prices at this stage of the season do not necessarily indicate a poor wheat year ahead. Since the harvest has only just been completed in many places and turned out larger than expected, there is not enough storage capacity everywhere. This can temporarily lead to forced sales, which puts additional pressure on prices.
Futures markets show resilience
Despite this, wheat futures on Euronext closed higher on Monday, with the exception of the expiring September contract. The December contract rose by €1.75 to €195.50 per ton. On the CBoT futures market in Chicago, the December contract also posted a small gain on Monday. Wheat trading on Euronext was supported by rising prices in the US and a weaker euro. However, falling prices in Russia somewhat offset that advantage.
Black Sea prices decline
In the Black Sea ports, wheat prices fell by about $3.00 per ton last week. The advisory firm SovEcon expects Russian wheat exports in August to reach 4 million tons, which is 200,000 tons more than the forecast from a week earlier. Compared to August 2024, however, this represents a decline – last year, Russia exported 5.7 million tons.
Global production forecast rises
The International Grains Council (IGC) has raised its forecast for global wheat production to 811 million tons, which is 3 million tons more than the July forecast. Last season, global wheat harvests totalled 800 million tons according to the IGC. The wheat harvest in the EU is projected by the IGC to reach 138.8 million tons this year, significantly more than last year’s 119.4 million tons.
