In W31 in the wheat landscape, the Agricultural Market Information System (AMIS) Crop Monitor indicates that the global wheat crop presents a diverse picture across regions due to shifting weather patterns. The European Union (EU) witnesses generally favorable conditions, while Spain faces low yields offset by strong output in central and southeastern Europe. The United Kingdom (UK) enjoys positive conditions, and Turkey's harvest progresses exceptionally. Ukraine records improved yields, Russia's winter wheat benefits, while China's spring wheat growth struggles. In the United States (US), winter wheat harvest varies, and spring wheat faces mixed conditions. Canada's wheat scenario is diverse due to expanding drought, while Australia benefits from average rainfall but lacks moisture in some parts. Argentina's planting improved but awaits more rain. The outlook varies, and upcoming weeks will define the impact on wheat crops and global markets.
The European Commission (EC) reports that 2023/24 EU soft wheat exports declined from 2.70 million metric tons (mmt) to 2.35 mmt as of July 30. This is a 13% year-on-year (YoY) decrease. The EC also reveals that 2023/24 French soft wheat exports dropped from approximately 600 thousand metric tons (mt) to 294.59 thousand mt in Jul-23, a decrease of 50.9% YoY.
Freight rates surged in the Azov-Black Sea region in Russia in W31, reaching USD 39 for transporting 3 thousand mt of wheat from Azov to the Sea of Marmara ports. After weeks of calm, demand from Turkish partners spiked, along with rising interest from Egypt and Greece. Direct export shipments from river ports also gained traction. Lower duties also bolstered trade, with Russia's wheat export duty dropping to USD 27.98/mt from August 2.
According to the Grain Union of Kazakhstan, the Kazakh wheat harvest in the 2023/24 season is projected to reach 14.5 mmt, slightly higher than the average of 13.5 mmt. Nevertheless, the Kazakh wheat quality is expected to fall within grades 4 and 5 due to erratic weather conditions, including a cold spring, excessively hot summer during flooding, and moisture deficiencies. This indicates that 2023/24 Kazakh wheat is expected to be inferior compared to the 2022/23 season, which predominantly featured wheat of at least grade 3.
Lastly, with a domestic wheat market demand of 5.5 mmt, 2023/24 Kazakh wheat export is estimated at 9 mmt, supported by the 2022/23 carry-over balance of 2.7 mmt. This indicates that Kazakhstan could offer around 12mmt for export. This volume aligns with Kazakhstan's logistical capacity of 1 mmt to 1.2 mmt per month. The Grain Union urges the government not to intervene in the market by imposing export quotas or duties, allowing for the rhythmic export of surplus and alleviating pressure on domestic prices.
