The prospect of a bumper harvest has been looming for weeks. This was made clear by the USDA’s monthly World Crop Situation report (WASDE), a reference for the industry, released on Monday.
Based on these estimates, global wheat production in 2024/2025 is expected to be 798 million tons, corn production is nearly 1.22 billion tons, and soybean production is 429 million tons.
Compared to the 2014/2015 season, wheat production increased by about 10%, corn production increased by 20%, and soybean production increased by 34%.
Prices in Chicago subsequently fell and are near their lowest level since 2020.
In Paris, soft wheat prices rose from 217 euros per tonne last Thursday to 207 euros on Wednesday. Rapeseed prices rose from 469 euros per tonne to 455 euros. For its part, corn has fallen below the symbolic mark of 200 euros per tonne.
The record set in spring 2022, about double the current price, is still a long way off. Then, two major grain exporters, Russia and Ukraine, invaded, raising concerns about food shortages.
Market participants were surprised on Monday by expectations for a record U.S. soybean yield, which was revised upward by a U.S. report on Monday.
“The report sharply lowered soybean prices, putting pressure on corn and wheat prices.” commented Dewey Strickler, analyst at Ag Watch Market Advisors.
According to him,The market is watching how far prices can go“.
“At some point, falling prices will inevitably lead to a recovery in demand.RJO futures broker Frank Cholly added that in his view, wheat prices will rebound first.
‘Disastrous quality’
Meanwhile, falling wheat prices on world markets are acting like a double whammy for French producers, with France’s soft wheat harvest expected to be the weakest since the 1980s.
“In addition to the small production volume, our quality is also disastrous” said Damien Vercambre, an analyst at Inter Courtage.
Protein levels look good, butproportion“He believes that an important standard for exporters does not exist.”The particles are small and not very full”, the expert explained.
Middlemen could certainly sort the wheat and keep only the best grains, but he suggested that some of the wheat used to grind flour for human consumption, such as bread or biscuits, might be turned into feed wheat to feed animals.
Wheat will compete with feed corn at a lower price.
Gautier Le Molgat, director of Argus Media France, said market participants were also watching the outcome of the Egyptian tender.
The country last week proposed buying millions of tonnes of wheat between October and April, an unusual move for the major wheat importer.
Cairo ended up buying only 280,000 tons, still a large amount.
But the proposed offer is mainly for Russian and Ukrainian wheat, with a small amount of Bulgarian wheat.
“This perfectly illustrates the fact that Russians and Ukrainians are still fully involved in the export market.”, said Mr. Le Molgat.
The prices of grains and oilseeds are also affected by the economic environment.We clearly feel that the market sentiment has changedMr Wickambl noted that since last week, investors have become increasingly concerned about the risk of a recession.
