US wheat prices firmed in the week ending 4th June, with the CBOT wheat September contract settling at USD 254.4/MT, up 3.8% on the previous week. The market has been buoyed by speculation over spring wheat crop in the US, due to scarce rain in the main growing areas. Parts of the US and Canadian plains are suffering from aridity, supporting US wheat prices.
Meanwhile, 80% of the France’s soft wheat crop ratings were reported in good-or-very-good condition in the week of 31st May. Warm weather at the start of June, following extensive rain during May is helping European wheat crops recover from the cold and dry spring. As of 3rd June, Euronext wheat price (September contract) was chartered at EUR 215.5/MT, down 6.4% on the previous four weeks. According to the United States Department of Agriculture (USDA), the EU wheat production is forecast to rebound by 6.4% y-o-y to 134 million tonnes in 2021/22. Also, with the 2021/22 harvesting season due to commence in July, supply tightness from the low ending stocks projected for the 2020/21 marketing year, at 9.2 million tonnes, is likely to be alleviated.
Nonetheless, prices remain very sensitive to unexpected weather events impacting the main grain producers. Therefore, weather developments affecting the spring and winter wheat, as well as maize (corn) crops will be key factors determining prices in the short term.