W2 Wheat Update: US Wheat Exports Break Records, Defying Market Trends with Strong Performance, Egypt's Wheat Import Surge 14.5% YoY in 2023

Wheat Prices Dip on Improved Crop Outlook in Key US States in Early 2024

Wheat prices continued declining in early 2024 due to improved crop conditions in the key United States (US) wheat-growing state of Kansas. The United States Department of Agriculture (USDA) reported a positive increase in the 'good' or 'excellent' rating for winter wheat in Kansas and Oklahoma. While some smaller growing states experienced a decrease in ratings, the notable improvement in Kansas, a significant contributor to US winter wheat output, boosted confidence in the crop and led to the removal of certain risk premiums. Chicago soft red winter wheat futures for Mar-24 dipped by 0.9%, testing support at the USD 6.00/bushel mark. European wheat contracts showed less resilience against the decline in Chicago prices.

US Exports 15.39 MMT of Cereal in 2023/24 MY, Wheat Shipments Peak

As of W2 of the 2023/24 marketing year (MY), the US exported 15.39 million metric tons (mmt) of cereal, surpassing the previous week's figure of 15.26 mmt and the same period in the previous year at 15.06 mmt. Notably, wheat shipments during this period reached a marketing cycle peak at 585.60 thousand metric tons (mt), significantly exceeding the previous week's figures and standing 87% above the average of the previous four weeks. Additionally, the USDA projects approximately 19.73 mmt of wheat exports for the overall 2023/24 MY.

India Anticipates Export Growth in 2023/24 MY Despite Wheat, Rice, and Sugar Export Restrictions

India's agricultural exports are expected to increase in the2023/24 MY, despite the imposition of restrictions on the export of wheat, rice, and sugar. Being the world's second-largest producer of wheat, rice, and sugar, India implemented export restrictions on these commodities in the previous year to control rising domestic prices. Despite these restrictions, the trade minister is optimistic about increasing agricultural exports, highlighting efforts to diversify shipments.

Egypt Witnessed a 14.5% YoY Surge in Wheat Imports to 11 MMT in 2023

In 2023, Egypt witnessed a substantial 14.5% year-on-year (YoY) increase in wheat imports, reaching 11 mmt. In contrast, the country imported 9.6 mmt of grain in 2022. Out of the total volume in 2023, 5 mmt were supplied to Egypt through government agreements. The number of entities engaged in wheat imports expanded to 45, covering both public and private sectors, indicating a notable increase from the 31 entities involved in 2022. The State Administration for Supply of Goods (GASC) remained the primary importer. This data highlights a significant surge in Egypt's wheat imports, illustrating changes in volume and the entities participating in the trade.

Ukraine Witnesses 1.2 Times Decrease in Wheat Exports for 2023/24 MY as of January 8

In the 2023/24 MY, Ukraine exported 19.42 mmt of grain and leguminous crops as of January 8, representing a decrease of 4.18 mmt or 1.2 times less compared to the same period last year. Specifically, the export of Ukrainian wheat amounted to 7.80 mmt, reflecting a reduction of 800 thousand mt compared to the previous year. These figures indicate a notable decline in Ukraine's grain and wheat exports for the specified period in the current agricultural year compared to the corresponding timeframe in the previous year.

Turkey Leads Russian Wheat Imports, Egypt and Iran See Substantial YoY Decreases

The Russian Grain Exporters Union reported that in the first half of the 2023/24 MY (July 1, 2023, to June 30, 2024), Turkey remained the primary importer of Russian grain and wheat. According to the union's assessment, wheat imports amounted to 3.93 mmt, reflecting a 2% YoY decline. Egypt ranks third in the list of cereal importers, experiencing a 24.7% YoY decrease in wheat purchases to 2.95 mmt. Iran, which holds the second position, reduced its purchases by 24.6% YoY to 2.93 mmt.