Recent developments in the global wheat market are influencing price trends and production forecasts. From promising updates in the USA to mixed signals from the EU and Canada, here’s what’s shaking things up.

European Wheat Forecast

• The European Commission reduced its forecast for soft wheat production in the EU to 120.8 million tons, which is 1.1 million tons less than a month ago.

US Summer Wheat Prospects

• Excellent yield prospects in North Dakota, the primary summer wheat-growing region in the US, have pushed prices down. The three-day field survey concluded with extremely positive results, projecting an average record yield of 54.5 bu/ac, nearly 30% above the five-year average.
• Cool and rainy conditions have promoted good plant growth, but the same weather has also facilitated the spread of fusarium, which can lead to mycotoxin contamination. The harvest is set to begin in six weeks, and hot weather expected until then might slightly reduce yields.

Canadian Wheat Conditions

• Recent heat and dry periods have negatively impacted summer wheat prospects in Canada. In Saskatchewan's Crop Progress Report, 76% of summer wheat was rated good to excellent, 14 percentage points lower than the previous week and only 11 percentage points above the five-year average.
• August forecasts are unfavorable, with hot and dry conditions expected.

International Demand

• On Monday, the wheat trade at Euronext was under pressure due to concerns over lacking international demand outweighing worries about the progress of the EU wheat harvest.
• In the US, previously strong foreign demand has slightly waned. The USDA reported wheat export sales of 309,300 tons for the week ending July 18, which was at the lower end of analysts' expectations of 300,000 to 635,000 tons.

Market Reactions

• On Thursday, wheat prices at Euronext continued to decline, marking the third consecutive day of losses. The most traded December futures dropped by 4 EUR to 227.25 EUR/t.
• At the US exchanges, signs were also bearish. The September contract at CBoT decreased by 9.25 cents to 537.75 cents/bu.

Overall Market Outlook

• Currently, there is limited room for price increases in the wheat market. Increased supply from the USA and Canada can largely offset production shortfalls in the Black Sea region.
• The weaker EU harvest will help reduce high EU ending stocks but will not lead to shortages. Western European prices are currently too high to be competitive in the global market, shifting the traditional EU customers' demand to other regions. For instance, Nigeria purchased 60,000 tons of wheat from the USA last week.