Wheat Futures Decline as Competition from Argentina and Australia Weighs on Prices
Wheat Futures Decline as Competition from Argentina and Australia Weighs on Prices
Falling EU exports and increasing global price pressure push wheat lower, while Russian harvest forecasts worsen further.Market Movements
- Euronext (Paris):March wheat futures fell by 1.25 EUR, closing at 232.25 EUR/t, retreating from Monday’s seven-week high.
- CBoT (Chicago):March wheat declined by 5 ct to 545 ct/bu (190.88 EUR/t).
Key Drivers
- Export Market Competition:
- EU Exports: Cumulative exports reached 10.54 million tons as of December 12, down 30% from 15.17 million tons last year.
- Russia: While export volumes are decreasing, Russian wheat remains competitively priced.
- Argentina: The new crop wheat is entering the global market at low prices.
- Australia: Increased competition in Asian markets is pressuring U.S. wheat prices.
- Russian Harvest Outlook:
- SovEcon’s 2025 forecast was reduced by 3 million tons to 78.7 million tons, citing the worst crop conditions in decades.
- Winter wheat production is now estimated at 50.7 million tons, 3.6 million tons lower than earlier forecasts.
- "The global supply and demand balance for wheat remains tight and is not fully reflected in prices yet," said SovEcon CEO Andrei Sizov.
- France: Signs of Recovery:
- Soft wheat acreage for the 2025 harvest is expected to rise by 8.7% to 4.51 million hectares, although it remains 0.8% below the five-year average.
- Crop conditions are better than last year but still below the levels of recent years.
Outlook
Wheat prices are under pressure due to increasing competition in export markets and weak EU export performance. However, worsening Russian harvest forecasts and gradual recovery in France add uncertainty. The tight global supply and demand balance may trigger stronger market movements in the coming weeks.Click here to reach our trading platfrom CMBroker
