W48 Wheat Update: Harvest Challenges in Brazil, France, Argentina, and Australia Faces Production Decline

Brazil Wheat Harvest Reached 94.2%

According to the National Supply Company (Conab), the wheat harvest in Brazil reached 94.2% of the estimated area for the 2022/23 season, with Paraná reaching 100% of the cultivated area, projecting a production 10% higher than the previous season. However, in Rio Grande do Sul, the wheat harvest reaches 93% of the area, with an estimated productivity of 28.38% below the initial projection due to excess rainfall. Argentina faces similar challenges, with 26.4% of the wheat harvest completed and an increase in the water deficit of crops.

Argentina's Wheat Export Forecast Up 108.76% for 2023/24

Argentina's wheat exports forecast increased by 108.76% for the 2023/24 campaign, reaching a value of USD 2.24 billion. However, the total volume exported in the new campaign is anticipated to be 8.7 million metric tons (mmt), which is lower than that of other successful campaigns. The ongoing harvest for the 2022/23 season is expected to reach 13.5 mmt, only 2 mmt above the 2021/22 season due to drought.

Russia’s Nov-23 Export Forecast Declines

Russia's wheat export shipment forecasts for Nov-23 declined to approximately 4 mmt, down from earlier predictions of 4.3 to 4.5 mmt. This adjustment is attributed to stormy weather in the southern part of the country. The adverse weather conditions have led to an estimated loss of 12 days in November for Black Sea terminals, with an average loss of eight days for the month, significantly impacting operations, especially at the ports of Kavkaz and Azov regions.

Russian Wheat Prices Surge on High Demand and Weather Challenges

Export prices of Russian wheat have experienced a notable increase due to rising demand from importers and reduced supplies caused by adverse weather conditions. Wheat with 12.5% protein content and delivery in Dec-23 saw a USD 5 per metric ton (mt) increase WoW, reaching USD 235/mt Free on Board (FOB), while delivery in Jan-24 rose to USD 241/mt. Despite these increases, Russian wheat remains the most competitively priced in the market, with French wheat at USD 248/mt and German wheat at USD 252/mt.

French Planting Hindered by Prolonged Rains

Winter grain planting in France has nearly halted due to prolonged rains. As of November 20, French farmers had sowed soft wheat on 74% of the planned area, marking a 3% increase week-on-week (WoW). In comparison, during the same period last year, sowing was completed in 98% of the area. Additionally, winter wheat condition has deteriorated, with 83% of crops in good or excellent condition, reflecting a 3% decrease in WoW.

Australia Faces Production Decline in 2023/24

Dry weather in Australia is estimated to reduce wheat output by around 25 to 28 mmt in the 2023/24 season. However, the crops have higher protein content and limited supplies of lower-quality grains for animal feed. Despite the overall decrease, Australia is anticipated to produce around 7.6 mmt of hard wheat (AH), up from 6.1 mmt in 2022, and approximately 7.9 mmt of premium white (APW), similar to the previous year.

Iran Achieves Self-Sufficiency in Khabazi Wheat

Iran achieved self-sufficiency in Khabazi wheat, ensuring a supply until June-24. The Deputy Minister of Agricultural Jihad stated that over 8 million people are active in the wheat, flour, and bread chain. Consequently, the purchase of guaranteed wheat reached 10.5 mmt in 2023, marking a 44% increase year-on-year (YoY).