Struggling cereal farmers - prices for cereals continue to hover at rock-bottom levels
The global wheat and corn market is experiencing some significant changes, as reported in the US Department of Agriculture's (USDA) August WASDE update.
In the United States, the summer wheat harvest is currently 5% complete, falling below expectations and the average. Similarly, the US winter wheat harvest is 86% complete, also below expectations and the five-year average. These developments could potentially impact the supply of wheat in the US market.
Across the Atlantic, the outlook for the European maize harvest remains cautious, with harvest conditions being closely monitored. High temperatures are still forecast for the start of the week in Europe, which could potentially affect the maize harvest.
In the Black Sea region, lower production forecasts could support global market prices. Ukraine's wheat production forecast has been reduced by 2.8 MMT to 19.8 million metric tons due to hot weather in southern Ukraine. However, Ukraine could potentially raise its wheat and corn production forecasts if weather conditions remain favourable.
Russia, another significant player in the global wheat market, has lowered its wheat production forecast by 0.3 million metric tons to 83.3 million metric tons, according to SovEcon. Russia's wheat export tax starts at zero from August 13, down from 19.4 rubles per ton, which could stimulate exports.
Meanwhile, the front-month wheat price at the Euronext fell to 196.50 euros per tonne, under pressure due to reduced trading activity on the physical market and the oversupply of wheat.
In France, the soft wheat harvest was 94% complete by August 4, and the soft wheat production forecast was raised from 32.6 million tons to 33.1 million tons. The French Ministry of Agriculture increased its production forecasts for wheat and barley on Friday.
On a global scale, analysts estimate global wheat stocks at 261.6 million metric tons (+0.1 million metric tons from July) and corn stocks at 278.5 million metric tons (+6.4 million metric tons). These figures suggest a steady supply of these commodities, but potential changes in production could impact these estimates.
Overall, the global wheat and corn market is experiencing fluctuation, with potential changes in production in key regions and shifts in prices. As always, weather conditions will play a crucial role in determining the final production figures for the season.
