Wheat
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Summary
A lower dollar today helped support wheat. There is also a little frost concern for Russia. Bulls are waiting to see some type of consistent change to US export sales. More reasonable bullish fundamentals are still weeks away. They include expectations for declining old crop export competition and expected new crop moisture forecasts for Russia, Ukraine and the US.
Market Report
Egypt Buys: The new Egyptian state buying authority, Mostakbal Misr, has said to have recently bought up to 250,000 tonnes of Russian wheat via a direct purchase.
Russian Crop Estimate: SovEcon decided to keep its recent 78.7 million tonne 2025 crop estimate for Russia unchanged from last month. They note there is currently little snow cover so winter grains do have risk. SovEcon started the year at 80.1 in October, raised it to 81.6 in November, then dropped it to 78.7 in December. Last year's crop, using USDA's estimate, is 81.5.
Rising Ukraine Prices: The past two weeks have seen a light $5 per tonne rise in Ukraine's wheat export prices. It is now at its highest level since 2022. Of note, Russian prices are stable. The trade is looking for changing UKR/RUS pricing as a sign the long awaited change in export competition is happening.
Russian Old Crop Exports: SovEcon estimates Russia's old crop July 2024 - June 2025 wheat exports at only 43.7 million tonnes. This would be a further decline from last year's record 55.5 export. This estimate is even tighter than USDA's 46.0 current view. If true it would imply their February - June exports ahead run a full -11.2 from last year. USDA's current view, already a bullish number, would imply -8.9 from last year.
USDA Stock Change: Quarterly stock estimates for December 1 filled in the blanks for the full Q2 quarter. USDA’s 1.570 billion bushel count was just over the 1.565 trade estimate (ALDL 1.521). This would imply the worst Q2 feed/usual since the 2015/16 marketing year. For the general whole-year balance sheet USDA only added 5 to their prior import view. Seed use was raised by 2. Though USDA could have lightly lowered their export view they kept that unchanged. To meet USDA’s current goal the remainder of sales through May can run -4% from average. That is a light concern give the recent four weeks at -23% and eight weeks at -10%. At this time, US sales have shown no change yet. We, and likely USDA, expect that to change once Russian and Ukraine exports make their expected decline ahead. Ending stocks, what will be left over at the end of the marketing year on May 31, were raised from 795 to 798 million.
USDA Winter Wheat Acreage: The first new crop report of the year was released by USDA today. Fall 2024 winter wheat plantings, for the summer 2025 harvest, were estimated up from 33.390 million the prior year to 34.115. The trade expected a decline to 33.366 (ALDL 33.329). Though not a massive change, it does tighten up available acres for spring wheat, corn and soybeans.
Extended US Moisture Situation: Spring rains are the main yield determinant for winter wheat, not winter conditions. With that in mind NOAA and some private US weather forecasters suggest light dryness moving up from Mexico in the new year. By April it may be running in the Western ¼ of Texas up through Nebraska. It is far too early to suggest this is a reason to buy wheat. But it could be another supportive spark in the coming weeks.
Chart: New lows were hit for Chicago recently. Positive for today, prices are now the best in one month. We hesitate to call this an uptrend...Rich Nelson
