Wheat Market Extends Rally Amid Supportive WASDE Report
Market Movements
- Euronext (Paris):The new lead contract March 2025 wheat rose by 1.75 EUR to 229 EUR/t, marking its highest level since November 22.
- CBoT (Chicago):March wheat futures increased by 3 ct to 561.75 ct/bu (196 EUR/t), driven by a positive reaction to the WASDE report.
WASDE Report Highlights
- U.S. Wheat Adjustments:
- The USDA raised its 2024/25 U.S. export forecast by 680,000 tons to 23.13 million tons, exceeding analyst expectations.
- Ending stocks for 2024/25 were reduced, surprising markets that had anticipated no change.
- Corn market strength, spurred by the WASDE, supported wheat prices more.
- Global Changes:
- Adjustments for wheat on a global scale were minor.
- European Union:
- Beginning stocks for 2024/25 increased by 800,000 to 15.5 million tons.
- Production was reduced by 1.3 million tons to 121.3 million tons.
- The export forecast was cut by 1 million tons to 29 million tons.
- Ending stocks rose by 500,000 tons to 10.6 million tons.
- Overall, these changes suggest a bearish outlook for the EU wheat market.
- Russia:
- The export forecast for 2024/25 was lowered to 47 million tons, down 1 million tons from November and 8.5 million tons less than the previous year.
- Reductions in Russian and EU exports were partially offset by increased projections for U.S. and Ukrainian wheat exports.
EU Wheat Exports
- Seasonal Performance:
- According to the European Commission, EU soft wheat exports reached 10.24 million tons by December 8, 2024, a 29% decline from 14.41 million tons during the same period last year.
Outlook
The wheat market's upward trajectory reflects optimism fueled by U.S. export strength and tighter-than-expected U.S. stock projections. However, bearish signals for the EU market and reduced Russian exports underscore mixed dynamics in global wheat trade. As the season progresses, attention will focus on how these adjustments influence international demand and supply balances.
