Global Wheat Prices Drop as IGC Forecasts Steady Production and Trade Policies Impact Supply Chains

On Friday, wheat prices on global exchanges fell by 1.6-3%, marking a significant 4.5% decline over the week. This drop comes in response to several key developments, including the latest International Grains Council (IGC) forecast, Türkiye’s extension of a wheat import ban, and Russia’s decision to allow grain transit from Kazakhstan.

IGC Forecast: Global Wheat Production Holds Steady

In its October report, the IGC maintained its forecast for global wheat production in the 2024/25 season at 798 million tons. The upward revision for Kazakhstan's wheat production, now expected to reach 17 million tons, was offset by reductions in Australia and Argentina. Australia’s forecast was lowered by 0.5 million tons to 31.3 million tons, while Argentina’s production is expected to fall by 0.3 million tons to 18.1 million tons. This balance is contributing to the stability of the global wheat supply, even as market pressures affect pricing.

Russia Tightens Control Over Wheat Exports

Last week, Russia temporarily banned grain imports from Kazakhstan but allowed transit through its territory for exports to other countries. In a move that signals further monopolization of the wheat market, Russia's Ministry of Agriculture and the Union of Grain Exporters announced that foreign intermediaries would be excluded from supply chains to 13 key countries. These nations include Egypt, Tunisia, Algeria, Morocco, Jordan, and Saudi Arabia, among others. Russian wheat will now be sold directly to government agencies, increasing the country’s control over export pricing and further pressuring global wheat markets.

Türkiye Extends Wheat Import Ban

Türkiye’s state agency, TMO, extended a 15% duty on wheat imports until December 31, a policy that will curb supplies and create losses for exporters, particularly in Russia. This move, combined with other geopolitical factors, is contributing to a tightening of wheat supply in some markets.

Wheat Futures Reflect Market Uncertainty

Wheat futures saw notable declines on Friday:

• Soft winter SRW wheat in Chicago dropped by 3% to $210.45/ton (-4.4% for the week).
• Hard winter HRW wheat in Kansas City fell by 2.7% to $213.4/ton (-4.1% for the week).
• Hard spring HRS wheat in Minneapolis decreased by 2% to $226.5/ton (-4.5% for the week).
• Wheat on the Paris Euronext declined by 1.6% to €226.5/ton ($246/ton).

Ukraine's Wheat Prices See Fluctuations

In Ukraine, wheat prices surged at the beginning of last week before decreasing by $1-3 per ton. Food wheat now trades at $210-214/ton (UAH 9,700-9,900/ton), while fodder wheat fell to $198-200/ton (UAH 9,250-9,300/ton). These fluctuations are driven by both domestic market conditions and international trade tensions.

Weather Conditions Pose Challenges for Sowing

While dry and warm weather in Ukraine, the U.S., and Russia has accelerated sowing activities, a lack of precipitation over the next 10 days could negatively affect crop emergence and the overall condition of seedlings. This weather uncertainty may further impact wheat production and prices in the near future.





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