Sowing data adds bearish pressure to wheat price

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According to the ADM Agriculture weekly market report the US market has traded down in the last few days after reports of bearish sowing data and an improved weather outlook for spring plantings in the country has weighed on values. All wheat sowings for the 2023 harvest were pegged at 20.1m hectares, up 9% on the year and the highest since 2015 with wheat at 15.1m hectares up 13%.

Despite the fall in US markets, geopolitics remains the key driver, due to continued uncertainty over the longevity of the Black Sea grain initiative. Finland’s joining of NATO and increasing tension between the US and China has only added to the problems. Also major grain traders are continuing to withdraw from Russia for the upcoming season, as participants are looking to offload their Russian businesses and assets.

In Ukraine, the agriculture ministry is reporting that grain exports have fallen 17% on the year to 37.4m tonnes so far this season, including 12.8m tonnes of wheat, 22m tonnes of corn and 2.3m tonnes of barley.

India relaxing terms

Elsewhere India is looking to relaxing its terms in procuring wheat from local farmers due to the heavy rain and hailstorms that have damaged the crop, just before harvesting in some key producing areas. Also USDA has suggested that Egypt’s 2023/24 wheat import requirement will be up this year by around 2.9% compared with last year to 10.8m tonnes due to population growth.

Meanwhile closer to home the EU commission has forecast the 2023/24 soft wheat production at 131m tonnes up from 126m tonnes last year. The EU crops are generally in fair to good condition, although more rainfall is needed to guarantee good conditions for further crop development and yield potential. Soft wheat exports from the EU reached 23.15m tonnes as of the 2nd of April up 7.6% from last year. Morocco, Nigeria and Algeria remain the main destinations.

Finally, back in the UK, prices have fallen almost £11/t over the past week as a firmer pound, waning demand and the outlook for a much larger than average carryout continues to weigh on the market.

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