On Tuesday, wheat prices rose on predictions of favorable data from Wednesday’s World Agricultural Supply and Demand Estimates (WASDE) report.
Chicago Board of Trade (CBOT) wheat futures for July delivery jumped 3.13% to $6.26 per bushel on June 11. Nonetheless, market analysts expect short-term profit-taking to lead to a 0.59% retreat to $6.22 in the coming trading session.
Forecasts of abundant global supply drove wheat into a nine-day crash that saw a sharp deterioration of 13.25%. However, once prices fell below the $6.10 support level on Monday, traders engaged in mass buying in anticipation of an upcoming recovery.
Optimism for the WASDE report overshadowed oversupply worries triggered by Turkey’s declaration of a temporary import ban. The world’s fifth-largest wheat importer will block all shipments from abroad to protect local farmers from cheaper foreign grain.
Analysts warned Ankara’s new restrictions would force its offshore suppliers to find other grain markets. Moreover, these sellers may offer their goods at lower prices to find new trade partners to replace Turkey.
Meanwhile, Poland’s Ministry of Agriculture said local processors procured significant quantities of feed and milling grains at low prices. This was followed by almost two weeks of near-perfect weather for farming, accelerating crop growth.
Hence, Warsaw anticipates the country’s wheat production and exports to grow steadily throughout the current crop year.
WASDE May Project a Decline in Global Wheat Stocks
Commodity specialists anticipate the June WASDE report raising the domestic ending wheat stock forecast while reducing the global stockpile estimate. The market sees closing inventories for 2024/25 expanding to 769.00 million bushels, up 3.00 million bushels from the May projection.
Conversely, industry watchers expect 2024/25 international inventories to drop to 257.50 MMT, 0.12% below the May estimate of 257.20 MMT. They noted that Russia’s key farming regions were ravaged by late frost trailed by arid weather, which worsened crop quality.
Lastly, wheat traders and speculators see the WASDE report revising its output guidance for Ukraine’s yield downward on unfavorable weather.
