Mixed Close for Wheat Futures on Euronext Amid Varied Market Influences

Hamburg, November 8 – Wheat futures on Euronext closed with mixed results on Monday. The December contract, set to expire in four weeks, gained 0.50 EUR to close at 216.25 EUR per ton, while later contracts saw slight declines. On the Chicago Board of Trade (CBoT), the December wheat future dropped by 7 cents to 565.5 ct/bu, equivalent to approximately 207.76 EUR per ton or about 0.208 EUR/kg (assuming a bushel weight of 27.216 kilograms of wheat).

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Pressure from Stronger U.S. Dollar and Weather Conditions in the U.S.

In Chicago, wheat prices came under pressure on Monday due to a stronger U.S. dollar and additional rainfall in the Southern Plains. These weather conditions could improve crop prospects, further dampening prices.

Euronext Wheat Markets Affected by Euro Depreciation and Favorable Sowing Conditions

On Euronext, the wheat market was influenced by opposing factors. The euro fell to a six-and-a-half-month low, making European wheat more competitive globally and limiting losses. At the same time, improved sowing conditions in Germany and France, which allowed for a swift completion of autumn fieldwork, added further price pressure. Trading activity on Euronext remained light due to a holiday in France.

Record Exports from Russia and Challenges for German and French Exports

According to SovEcon, Russia exported a record 5.6 million tons of wheat in October. Exports are expected to drop to 3.9 million tons in November, which would still exceed the 3.4 million tons shipped in November 2023. With Ukraine, Romania, and Bulgaria also exporting at high volumes, export opportunities for German and French wheat remain limited.

Russian Export Volume Forecast for 2024/25

SovEcon estimates that Russia exported 20 million tons of wheat during the first four months of the fiscal year (July to October). For the full 2024/25 fiscal year, total exports are forecasted to reach 45.9 million tons, slightly below the USDA’s estimated 48 million tons. With an average of 5 million tons shipped monthly so far, the remaining eight months would require an average of 3.24 million tons per month, potentially supporting the market in early 2025.

Declining Export Prices and Doubts About Russia's Harvest Size

Russian wheat export prices declined last week despite government calls for exporters to raise prices. Wheat with a protein content of 12.5%, scheduled for December shipment, fell by 4 USD to 228 USD/t FOB, according to consultancy firm IKAR.

Doubts on Official Harvest Estimates and Sowing Progress in Russia

There are also concerns that Russia’s 2024 harvest may be smaller than official figures suggest. Arkady Zlochevsky, head of the Grain Union, stated on Monday that official statistics likely include yields from regions annexed from Ukraine. He also indicated that figures might be based on gross weight rather than net weight to inflate reported volumes. Zlochevsky questioned the Ministry's reported progress on winter crop sowing, indicating that the estimated 19 million tons likely include the "new regions."