Wheat Market Update: Russian Winter Wheat May Be in Better Shape Than Feared

Market Movements

• Euronext (Paris):The March wheat future dipped by 0.25 EUR to 227.25 EUR/t due to weak export demand and a stable euro.
• CBoT (Chicago):The March contract gained 1.5 ct, closing at 558.75 ct/bu (205.07 EUR/t), while spring wheat in Minneapolis recorded the highest gains.

Russian Winter Wheat: Mixed Signals

• SovEcon Assessment:
  • The condition of Russian winter wheat might not be as poor as earlier feared.
  • Current estimates overlook late germination due to climate change, with some crops still vegetative as of late November—unusual compared to a decade ago.
  • SovEcon hinted at a possible downward revision of the 2025 wheat harvest forecast, currently at 81.6 million tons.
• Weather Data:
  • The state weather agency reported that 37% of winter crops are in poor condition or un-germinated due to dry soil, compared to 4% last year.
  • These numbers might not entirely reflect recent warmer conditions in southern regions.
• IKAR Insights:
  • Many crops in the European part of Russia are at an early single-leaf stage, considered beneficial for winter survival, but officially categorized as "poor condition."
  • Despite the weather agency's assessment, Dmitry Rylko from IKAR noted that this stage increases survival chances.

Export and Demand Dynamics

• Euronext Pressures:
  • A strong euro and weak demand from importing countries weighed on European wheat prices.
  • Persistently low Russian prices also dampened the market.
• US Export Data:
  • Weekly wheat export inspections (ending Dec. 5): 226,513 tons, below trade expectations (250,000–400,000 tons).
  • Exports were 24% lower than last week and 23% lower year-over-year.
  • However, cumulative exports since June 1 reached 11.217 million tons, 30% higher than last year.

Outlook

While Russian winter wheat conditions are better than anticipated, uncertainties remain about the final harvest potential. Weak export demand continues to cap gains on Euronext, while global attention turns to the WASDE report for potential market-moving insights.

Click here to reach our trading platfrom CMBroker