In W27 in the wheat landscape, the European Commission (EC) revised downwards European Union (EU) soft wheat production in the 2023/24 season to 128.9 million metric tons (mmt), down 2.7 mmt compared to the June estimate but up 3.2 mmt YoY. The EC also estimated EU soft wheat exports in MY 2023/24 at 32 mmt, unchanged from the June forecast but up 1 mmt YoY. Additionally, EU soft wheat domestic consumption was projected to reach 101 mmt, an increase of 1.5 mmt compared to the June projection and up 2.1 mmt YoY. The EC further adjusted downwards EU wheat ending stocks in the 2023/24 season to 20.5 mmt, down 3.4 mmt compared to the June estimate but at the same level as MY 2022/23. Furthermore, the EC indicates that EU soft wheat exports in the 2022/23 season amounted to 31.1 mmt, up 12% compared to 2021/22, while durum wheat exports amounted to 742 thousand mt, down 24% YoY.
The Secretariat of Foreign Trade (SECEX) indicates that Brazilian wheat imports from Jan-23 to Jun-23 reached a record low of 2.03 mmt, the lowest volume for the period since 1997 when imports were 1.96 mmt. This decline in imports is attributed to Brazil's record 10.6 mmt harvest in 2022 and the 2023 strong harvest expectation. The states of Rio Grande do Sul and Paraná, leading producing regions in Brazil, are expected to have good wheat harvests. National consumption stands at 12.4 mmt, which will be supplemented by imports. However, Brazil has seen an increase in wheat exports in recent years, with a record 3.1 mmt volume in 2022 and 2.1 mmt already exported from Jan-23 to Jun-23.
The Russian Grain Union indicates that Russia's wheat exports in the 2022/23 season (Jul-22 to Jun-23) reached over 53 mmt, almost 1.5 times higher than MY 2021/22. Wheat accounted for 85.6% of total exports, with Jun-23 witnessing a record 4.2 mmt export volume, the highest for the month in the past five years. The increased exports are attributed to active demand from regular importers and new countries entering the market, along with decreased harvest expectations and potential price increases. Russian wheat shipments were mainly destined for Egypt at 11.9 mmt (22.5%), Turkey at 10.2 mmt (19.3%), Algeria at 3.26 mmt (6.1%), Iran at 3.14 mmt, and Saudi Arabia at 3.14 mmt. The shipment growth was supported by a 42% decrease in wheat prices to USD 230-235/mt over MY 2022/23, enhancing competitiveness in the global market. However, SovEcon highlights that Russian wheat purchasing prices, with a content of 12.5% protein, increased by USD 19.83 to USD 168/mt since the beginning of Jun-23, the highest price since Jun-22. The increase in wheat prices is attributed to favorable market conditions, a reduction in export duties due to the correction of the calculation formula from USD 31 to USD 29, and increased competition among exporters. SovEcon expects wheat prices within Russia to continue growing in the short term, driven by active sales and the Russian Ruble weakening.
