Posted on January, 23, 2024 at 10:10 am
A weak tone in world wheat markets persisted into 2024, although there were some bullish reactions to cold weather across the Northern Hemisphere in the closing weeks of January.
US Wheat Associates (USW) in its Jan. 19 Weekly Price Report noted that wheat was lower as a lack of supportive news has allowed bearish trends to continue.
“Even so, recent large sales of SRW continue to provide some support,” USW said, also reporting that “recent cold temperatures across the northern US have hampered rail logistics and demand for Hard Red Spring wheat from the Pacific Northwest and HRS (Hard Red Spring) demand from the PNW (Pacific Northwest),” also provided a bullish influence.
USW added that “a recent cold snap in France and Germany likely caused limited damage to waterlogged wheat in fields, with heavy showers that further delayed sowings ahead of this year’s harvest,” citing a German statistics agency forecast of a 7% fall in winter wheat planted area for 2024 harvest, “notably to poor field conditions.”
The United States was also hit by cold weather, affecting major wheat-growing areas.
“Cold temperatures in the Northern Plains coupled with the snow cover kept conditions constant, while further south in the central US the lack of snow left the topsoil exposed to the harsh conditions, drying it out,” USW said.
In its Jan. 11 Grain Market Report, the International Grains Council (IGC) noted a net 1% decline since the mid-November report, but with “mixed changes across underlying origins.”
“Amid ample nearby availabilities and weakness in row crops, values dropped to a fresh two-and-a-half-year low in late-November, but rebounded sharply thereafter, led by gains in the US, where exporter sentiment was spurred by an upsurge in Chinese demand for SRW wheat,” the IGC said. “However, there were divergent trends across US wheat classes, as steady to firmer winter wheat quotations contrasted with net declines for spring wheat, amid talk of competition from Canada, where offers have also eased in recent weeks.”
With continued worries about export competitiveness, French fob values mostly softened since November, albeit lower prices prompted fresh overseas buying interest, with declines also capped by weather-related concerns about local 2024-25 production prospects, the IGC added.
Turning to Russia, the London-based international organization said quotations there firmed moderately, supported by currency movements, occasionally reluctant grower selling and seasonally difficult shipping conditions.
“Fob prices at Ukraine's deep-sea ports were thinly quoted, albeit as the seaborne corridor became the main route for exports, pressuring freight costs for land and river deliveries,” the IGC added.
The USDA’s Foreign Agricultural Service (FAS) in its Jan. 12 Grain: World Markets and Trade report noted a decline in US prices since the December World Agricultural Supply and Demand Estimates report, which was published on Dec. 8. The move reflected “adequate global supplies, increased competition as Southern Hemisphere crops come to market, and a strong US dollar,” it said.
“Soft Red Winter (SRW) dropped $14 to $259/tonne on slowing demand from China,” the FAS said. “Hard Red Spring (HRS) prices declined $14 to $304/tonne, reflecting stronger competition from Canadian spring wheat.”
The FAS also reported Hard Red Winter (HRW) down $9 to $285/tonne, “reflecting recent precipitation in the HRW belt and favorable growing conditions compared to last year.”
“Major exporter quotes are largely unchanged since the December WASDE,” the FAS said. “EU and Russian quotes have converged in tight competition. EU quotes eased by $5/tonne, while quotes from Russia edged $5/tonne higher amid strong overseas shipments.”
Source: World Grain