On Thursday, wheat prices declined amid Kazakhstan’s output surpluses as good weather boosted optimism for the looming fall harvest.
In the Asian afternoon session, the crop’s futures for December delivery eased by -0.07% to $5.45 per bushel.
The Foreign Agriculture Service (FAS) has increased its forecast as Kazakhstan has good weather conditions, which could cause a surge in output for the upcoming fall harvest.
According to reports, crop production is expected to be 15.8 million tonnes from 2024 to 2025, better than the 12.1 million tonnes produced last marketing year.
Furthermore, Barley production from 2024 to 2025 is anticipated to reach 3.4 million tonnes, an increase from last year’s 2.6 million tonnes. Exports are also projected to rise to 1.6 million tonnes, compared to 1.2 million tonnes previously.
However, FAS noted that sluggish demand from traditional markets like Iran, shipment issues, and barriers in China and Russia challenged exports.
Moreover, farmers are worried about the harvest pressure, and international trade concerns would push prices to decline.
Meanwhile, the Kazakhstan government aims for another six-month curb on wheat imports amid solid rivalry from Russia.
Reports show that heavy global supply and competitive Black Sea shipment have weighed wheat prices. This is before a potential halt on Canadian rail on Thursday.
Kazakhstan Prohibits Wheat Import to Secure Domestic Market
According to reports, the Kazakhstan Ministry of Agriculture has revealed its ban on wheat import to Astana.
The stoppage applies to all countries, including fellow members of the Eurasian Economic Union, such as Armenia, Belarus, Kyrgyzstan, and Russia.
Moreover, the ban will be effective from August 21 to December 31 this year and does not apply to crops within Kazakhstan’s territory.
The ministry stated that the measure is to safeguard the domestic market. Astana’s wheat imports this year matched 2023 levels, and last year’s harvest left ample domestic supply.
Meanwhile, good weather conditions in the country anticipate a bountiful grain harvest, which is likely to boost supply in the local market.
