Market Report: Wheat Prices Recover After Recent Declines

November 16, 2024 – The wheat market ended the week with notable gains as futures on significant exchanges rebounded from multi-month lows. The most actively traded March contract on Euronext rose by €4.25 to close at €224/t, narrowing the weekly loss to €2.75 (1.1%). On the CBOT, the March contract gained 5.75 cents to reach 554 cents/bu (€193/t).

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Buyers Return After Multi-Month Lows

Following sharp declines midweek, the low price levels attracted buyers on Friday. While it remains uncertain if this marks the start of a broader recovery, fundamental market dynamics are shaping sentiment. In the U.S., wheat markets continue to face pressure from a strong dollar, while in Western Europe, ample supplies and competitive prices from the Black Sea region weigh on the market. The European Central Bank set the euro's reference rate at $1.0583 on Friday, slightly above Thursday's one-year low but 1.3% below last week and 2.8% below early November levels.

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Support from Export Expectations

Market participants positively received reports of wheat shipments to Morocco. Additionally, expectations of reduced export volumes from the Black Sea region later in the 2024/25 marketing year support prices.

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Planting Progress in Key Regions

According to a weekly report, wheat planting in key European growing regions has accelerated thanks to dry weather in early November. As of November 11, 70% of the planned winter wheat area had been sown, up eight percentage points from the previous week. Although progress remains 13 points below the five-year average, it is faster than the languid pace of the last year. With another dry week allowing for further planting, the delay will likely be mitigated before rain returns next week.

Winter barley planting has reached 83%, a weekly increase of 5 percentage points, though it remains below the average pace of 91%. The condition of winter barley is rated 84% good to excellent, down 3 points from the prior week and 2 points from a year ago. Durum wheat planting, at 32%, also lags the average pace of 42%, but with a significant weekly gain of 22 percentage points. Harvest delays for autumn crops, including corn, are slowing planting. The corn harvest is 71%, up 13 points from the prior week but still far behind the average pace of 93%.

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US Export Data Shows Moderate Gains

The USDA’s weekly export report showed a slight improvement in wheat sales for the week ending November 7, totalling 380,056 tons. This figure landed in the midrange of expectations (250,000–550,000 tons). Key destinations included South Korea and Japan, which accounted for 70,600 tons.

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Conclusion: The wheat market is regaining strength after recent declines, supported by buying activity, export expectations, and planting progress. However, headwinds from strong currencies and competitive supplies continue to shape the outlook.