On Wednesday, wheat futures dropped as forecasted rain in dry Russian sowing areas led investors to secure profits after a 10-month price surge.
In the Asian afternoon session, wheat futures ending in July declined by -1.00% to $6.93 per bushel.
According to Russia’s Grain Union, approximately 1.5 million hectares of Russian crops were damaged by frost. Their agricultural consultancies cut local wheat harvest forecasts by around 10 million metric tons.
However, weather charts indicate that this week’s rain could cover more of southern Moscow than initially anticipated.
Moreover, Ukraine’s grain union slightly lowered its harvest estimates due to dry weather and a reduced planted area.
Analysts estimate that combined Russian and Ukrainian wheat production is around 100 million tons. Production falling below this level could significantly disrupt global wheat trading patterns.
The experts added that Ukraine’s potential remains relatively strong, supported by sufficient soil moisture reserves, while Russia’s crop could also see improvement with increased moisture in June if it materializes.
Meanwhile, the US Department of Agriculture (USDA) assessed 48.00% of the nation’s winter wheat crop as good-to-excellent, marking a -1.00% decline from the previous week and falling short of trade forecasts. However, it remains the highest rating for this period since 2021.
India to Import Wheat After Six Years to Boost Reserves
India reportedly plans to resume wheat imports after six years to replenish depleted reserves and control rising prices amid electoral changes and declines.
According to reports, officials said New Delhi will likely scrap a 40.00% tax on wheat imports this year.
With the onset of the new-season wheat harvest, the government will probably delay abolishing the import tax until after June, coinciding with Russia’s harvest.
Meanwhile, wheat stocks in state warehouses in April plummeted to 7.5 million metric tons, marking the lowest level in 16 years.
The decline followed a record-selling spree by the government, which offloaded over 10 million tons to flour millers and biscuit makers to curb prices.
