Weekly Agri- Commodities Recap: 17-21/06/24

The week began with a continued decline in US wheat prices due to harvest pressure and stabilized Russian crop forecasts. The US winter wheat harvest advanced rapidly, reaching 27% completion, significantly higher than expected. The condition of remaining winter wheat fields improved to 49% good/excellent. US spring wheat ratings increased by four percentage points to 76% good/excellent, while US corn and soybean conditions worsened by two percentage points each.  IKAR reported a drop in 12.5% protein Russian wheat prices to $234 per ton. US weekly export inspections exceeded expectations for soybeans, corn, and wheat. The NOPA reported a record May soybean crush of 183.6 million bushels.

On Tuesday corn and soybeans rebounded due to worsening US crop ratings and a heatwave, while wheat prices continued to decline. EU soft wheat exports reached 29.15 million tons, with corn imports rising to 17.97 million tons. Romania's Constanta port handled 12.6 million tons of grain in the first five months, a 3.6% year-over-year increase despite reduced Ukrainian grain volumes. Ukraine exported 0.51 million tons of wheat and 1.3 million tons of corn in early June, suggesting USDA estimates may be too low.  The US experienced a hot week with good soil moisture, critical for corn development if temperatures remain high into July.

Wednesday MATIF milling wheat futures traded within a narrow range but closed higher. The session was slow due to the US holiday, with lower prices on CBOT.  The German Association of Farm Cooperatives projected 2024 wheat production at 20.34 million tons, a slight increase from May estimates but down year-over-year. Winter rapeseed production is expected to decrease by 8% to 3.89 million tons.  IKAR analysts revised the Russian wheat crop forecast upward to 82.0 million tons. The Buenos Aires Grain Exchange increased the wheat planting area to 6.3 million hectares, projecting a crop of 18.1 million tons. Non-commercial participants reduced net long positions in MATIF milling wheat and rapeseeds.

On Thursday grain prices continued to fall as US weather maps improved, reducing bullish sentiment. The EU reimposed customs duties on Ukrainian oats due to exceeded quotas. Ukraine may implement a minimum price mechanism for agricultural exports starting in August, raising concerns among traders about potential market disruptions.  NOAA forecasted a hot and dry July, but short-term forecasts indicated rain for most of the Corn Belt. Market participants are awaiting the USDA June stocks and US acreage reports, which are expected to be significant.

End of the week, wheat prices attempted to strengthen but ultimately closed down despite stronger-than-expected US weekly export sales.  French soft wheat conditions remained stable at 62% good/excellent, though down from 83% last year.  Russia announced adjusted grain export duties starting July 1, increasing baseline prices for duty calculations.  US weekly export sales totaled 579,000 tons of wheat, 605,000 tons of corn, and 640,000 tons of soybeans, with corn sales disappointing.