US prices are down $6/t on the week as harvest continues to produce higher-than expected yields.

US wheat continues to carry a hefty export premium, and although this has narrowed against other origins recently, export trade remains thin as northern hemisphere harvests ramp up.

Argentina’s 2019/20 wheat production is estimated at 21.5mln t, according to the Rosario Board of Trade, up 2.5 mln t on last year’s harvest .

Russia’s agriculture ministry expects this year’s grain crop to total 118mln t and puts exports for the 2019/20 marketing season at 45mln t. However, this comes at a time when wheat production forecasts are gradually being trimmed due to the adverse weather during June. The latest release by the Russian Grain Union pegged the crop at 78mln t, down from 82.5mln t previously.

Ukraine expects its 2019 grain crop to remain around last year’s figure of 70mln t. It had harvested 17.4mln t as of 15 July.

Egypt has purchased 60,000t of wheat from Russia for 21-31 August shipment. This was the first purchase from Russia since 19 June – of the 770,000t total Egypt has bought this season, Russia has only sold 230,000t, with Romania the top supplier at 480,000t.

EU harvests continue to progress. France continues to report big wheat yields but low proteins, which is likely to increase the percentage of the crop deemed as feed.

Farm co-op DRV reports Germany’s 2019 wheat harvest will increase 18% compared with last year’s droughted crop to 23.8mln t. This remains below its previous forecast of 24.7mln t.

UK new crop prices are mainly unchanged on the week, with sterling dipping on talk of a no-deal Brexit. Old crop prices continue to weaken on a lack of demand, with prices in most of the country now trading at parity, or below, harvest levels.

In summary, the wheat market continues to struggle as harvests progress. Although weather will have a say on final crop numbers, especially in the EU, Black Sea and US spring crops, it is apparent there is no shortage of wheat, just a lack of demand.

Short-term the likelihood remains that as harvest supplies increase, prices will drift lower, as exporters attempt to find demand. In the long-term it remains difficult to write a bullish story for wheat, unless it receives support from the corn story or from external markets or political intervention.

Source ADM