On Monday, wheat prices plummeted as Russia’s Ministry of Agriculture reportedly imposed a higher cost on its exports as lower supply was anticipated.
In the Asian afternoon session, the US commodity’s futures for December contracts eased by -0.83% to $5.82 per bushel. London wheat futures for March delivery declined by -0.90% to £187.25 ($244.57) a ton.
According to reports, the Russian Ministry of Agriculture has set a price floor of $250.00 per metric ton on its wheat exports due to expectations of lower supply.
However, analysts noted that Moscow is still offering sales on the crop below the imposed costs.
Furthermore, rainfall in the Black Sea and the US is projected to boost, strengthening newly planted winter wheat crops.
Reports revealed that experts expect limited supply from Russia in the remaining parts of the current season, adding to the high shipment pace in the first three months of the year.
Meanwhile, weekly grain exports are projected at 1.11 million tons, better than 0.97 million from last week. This also includes 1.05 million tons (MT) of wheat, higher than 0.87 million.
Moreover, a week ago, Russian authorities eased their official outlook for this season’s grain harvest to 130.00 million tons, together with 83.00 million tons of wheat.
Iraq Faces Unexpected Wheat Surplus
Iraq’s 2024-25 wheat surplus results from record planting, government subsidies, and favorable rainfall have boosted self-sufficiency and harvest yields.
The 2024 wheat harvest in the country has been excellent, with a record output of 6.30 MT. This impressive figure stems from a planted area of approximately 2.70 million hectares, yielding an average of 2.33 tons per hectare (t/ha).
Furthermore, the current harvest stands out significantly compared to last year’s harvest of 5.20 MT and the five-year average of 4.3 MT.
On the other hand, the extensive crop damage in the country wiped out 2023-24 barley production to 200,000 tons. However, its output recovered this season to 1.4 MT, better than the five-year average of 8550.00 tons.