Wheat Futures Slide as Global Supply Weighs on Prices
Wheat Futures Continue to Decline Amid Supply Pressure
Wheat prices in Chicago saw a dip for the third straight day this week. Traders pointed to increased supply from new harvests in Australia and Argentina as the main reason for the downward trend. One grain trader commented, "There's just too much wheat in the market right now."Despite this, Russia’s recent restrictions on exports have kept the decline from getting worse. Russia has slashed its wheat export quota by two-thirds for the 2025 season and raised export duties, adding to global uncertainty. The most-active wheat futures on the Chicago Board of Trade (CBOT) dropped by 0.60%, settling at $5.44-1/2 per bushel.
Soybeans Under Pressure as Brazil Forecasts Record Crop
The soybean market is feeling the heat from Brazil’s expected bumper harvest. Analysts are forecasting a production of 172.2 million tonnes for the 2024-25 season. If achieved, this would beat the previous high of 162.4 million tonnes set in 2022-23.Agroconsult, a leading advisory firm, noted, "Brazilian farmers are making up for last year’s losses caused by bad weather." While soybean prices dipped by 0.30% to $9.86-1/2 per bushel, traders remain cautious about how this surplus will impact global prices in the coming months.
Corn Follows Suit As Steady Harvest Progress
Corn futures also softened, with prices dropping 0.50% to $4.30-3/4 per bushel. A trader from Iowa shared, "The market is in wait-and-see mode. Everyone is watching Brazil, and honestly, it’s hard to say what will happen next."USDA’s weekly report revealed export sales for both wheat and corn were within expectations, though soybean sales surpassed estimates. Higher demand for soy oil and meal seems to be driving interest in American soybeans.
Russia’s Tightened Quotas and Export Duties Add Complexity
Russia’s decision to freeze food import quotas and impose higher export duties on wheat aims to control domestic inflation. The government announced an export limit of 11.1 million tonnes for February to June 2025, compared to 29 million tonnes during the same period this year.This move, while stabilizing Russian prices, could create ripples in the global market, especially as Southern Hemisphere exports pick up speed.
French Wheat Sowing Exceeds Expectations
In Europe, wheat sowing in France has progressed faster than in previous years, thanks to favorable weather. The dry spell in November helped farmers recover from earlier delays caused by spring rains. France Agrimer’s data shows that sowing has outpaced the 5-year average, providing some relief to European markets.Conclusion: A Cautious Market Awaits 2025 Trends
As we look ahead to 2025, market players remain uncertain about how the global supply and demand dynamics will unfold. A trader summed it up perfectly, "We’ve got plenty of wheat for now, but next year might look very different. It all depends on weather and government policies."Click here to reach our trading platfrom CMBroker
