Global wheat market: the price premium of spring wheat relative to winter wheat further shrinks

 

On Friday, the Chicago Board of Trade (CBOT) September soft red winter wheat futures fell by about 8.
5 cents or 1.
23% from a week ago, to close at 684 cents/po
.
The September hard red winter wheat futures on the Kansas City Futures Exchange (KCBT) closed at about 646 cents per bus, down 5.
5 cents or 0.
84% ​​from a week ago
.
The September hard red spring wheat futures on the Minneapolis Grain Exchange (MGEX) closed at approximately 883.
50 cents per bus, down 33.
75 cents or 3.
68% from a week ago
.
Euronext's December 2021 milling wheat period reported approximately 214.
25 euros/ton, down 1.
75 euros or 0.
1% from a week ago
.
The spot price of Argentine wheat is US$277/ton, up US$1 or 0.
36% from a week ago, FOB price
.
The Zhengzhou Commodity Exchange's wheat futures for delivery in September 2021 closed at about 2,767 yuan/ton, an increase of 4 yuan from a week ago
.

 

　　In the United States, the condition of the spring wheat crop continues to decline
.
According to the weekly crop progress report released by the US Department of Agriculture, as of July 18, the winter wheat harvest in the United States was 73% complete, with an average of 74% over the five-year period
.
The condition of spring wheat crops continued to deteriorate.
As of July 18, the excellent and good rate of spring wheat was only 11%, compared with 16% last week and 68% in the same period last year
.
Weather forecasts show that only sporadic rainfall will occur in the northern plains of the United States in the coming week, and the temperature will rise to 100 degrees Fahrenheit, which will further increase the pressure on local spring wheat growth
.
The U.
S.
Department of Agriculture has predicted that this year’s U.
S.
spring wheat production will fall to its lowest level in 33 years
.

 

　　In Europe, the rainy weather is worrying about the quality of wheat
.
The past month has experienced heavy rains in many parts of the European Union.
The main wheat-producing countries in France and Germany have received twice the normal rainfall
.
Due to the heavy rain at the beginning of the wheat harvest, it not only damages the yield, but may also cause fungal diseases and damage the quality
.
In Germany, heavy rains and flash floods caused damage to crops, and cargo transportation in parts of the Rhine was interrupted
.
The German Agricultural Cooperative Organization-Leifeisen Association (DRV) lowered the forecast value of German cereal production in 2021 to 43.
8 million tons, and wheat output is expected to be 22.
82 million tons
.
Since the flood has not receded, the degree of damage to the crops is still unclear, but a considerable part of the wheat will be reduced from the edible grade to the feed grade
.

 

　　In Canada, spring wheat yields are likely to be damaged by the hot and dry weather, but going north, the crop prospects are more optimistic
.
Analysts reminded that there is a risk of being too pessimistic about the outlook for pending output
.

 

　　In Russia, a number of agencies have recently lowered their wheat production forecasts in Russia.
Among them, IAKR lowered its wheat production forecast for Russia in 2021 from 83.
6 million tons to 81.
5 million tons because of the lower output data in the southern region
.
In comparison, the Russian Ministry of Agriculture estimates that this year's wheat output will be 80.
7 million tons
.
SovEcon, another consulting agency, said that the harvest results show that both wheat yield and yield data may be further downgraded
.
However, this week the Russian Ministry of Agriculture maintained its 2021 cereal output forecast unchanged at 127.
4 million tons, of which wheat output was 81 million tons
.

 

　　The Russian analysis agency said that Russian wheat export prices rose last week because of the sharp rise in wheat prices on the Chicago Board of Trade (CBOT) and the decline in Russian production prospects
.
According to IKAR, as of July 16, the FOB price of 12.
5% ​​of Russian wheat in the Black Sea port was quoted at US$241 per ton, an increase of US$3 from a week ago
.
Another consulting firm, SovEcon, said that the price of wheat was US$239 per ton, which was US$5 higher than a week ago
.

 

　　According to consulting agency APK-Inform, Ukrainian wheat export prices have risen in the past week because of bad weather, which has brought uncertainty to the outlook for Black Sea wheat production
.
As of July 16, the FOB price of 2021 Ukrainian soft wheat with a protein content of 12.
5% ​​was 225 to 232 US dollars per ton, up 3 to 6 US dollars from a week ago; feed wheat prices stabilized at 217 to 224 US dollars per ton
.

 

　　The US Department of Agriculture’s weekly export sales report shows that for the week ending July 15, the net sales of wheat delivered in the United States for the 2021/22 fiscal year (beginning on June 1) were 473,200 tons, which was 11% higher than last week.
44% higher than the four-week average
.
So far this year, the total US wheat export sales have reached 7,588,800 tons, a decrease of 14.
2% over the same period last year
.