The ongoing wheat harvest across the Northern hemisphere continues to pressure global wheat prices down. The US Hard Red Winter (HRW) wheat harvest is now complete, despite initial weather concerens at the start of the harvest, thus, the CBOT wheat price experienced a 10.7% decline, y-o-y to $174.3/tonne. According to the USDA’s NASS report, the HRW wheat supply was larger than expected, following favourable weather conditions at the later stage of the harvest.
Furthermore, a bumper harvest in France has resulted in the Euronext Paris wheat price seeing a considerable y-o-y decline by 16.7% at EUR 168.3/tonne, which also resulted in expectations for a favourable export season. France Agrimer expects the French 2019/20 wheat exports outside the European Union to reach the highest level since 2015/16 at 11 million tonnes, following the country’s bumper harvest (Reuters).
From a global perspective, the latest USDA report estimates the global 2019/20 wheat crop to increase by 4.7%, compared to the previous season. Beyond the decently supplied global wheat market, the quality of the crop from the major producers is seen to be good, thus providing a further bearish tone. However, there are now concerns for the Australian and Argentine wheat crops, due to dry weather, which the market will now keep an eye on.
A well-supplied global wheat market has also resulted in lower maize prices. The US maize price dropped by 3.5% y-o-y to $139.4/tonne, despite the projection of a lower 2019/20 global maize crop by the USDA (-1.2%, compared to the previous season).