1. Weekly News

Global

Global Wheat Production Outlook Reduced for 2024/25

The International Grains Council (IGC) has reduced its global wheat production forecast for 2024/25 by 2 million metric tons (mmt) to 796 mmt, citing a diminished outlook for the European Union (EU). The EU's wheat production is now projected at 120.3 mmt, down from the previous estimate of 121.8 mmt and significantly lower than the 133.1 mmt harvested in the prior season. This decline is attributed to France's most minor wheat crop in 40 years and a sharp drop in Germany's output, as both significant producers faced heavy rainfall over the past year.

Australia

Western Australia's Wheat Harvest Exceeds Expectations for 2024/25

Western Australia is set for a robust wheat harvest in the 2024/25 season, with production projected at 10.33 mmt, marking the third-largest crop on record despite early-season rainfall deficits. This figure surpasses the Sep-24 forecast by 1 mmt, driven by higher-than-expected yields, even with visible crop stress such as yellowing and damage. Harvesting began late due to heavy rains, with further delays possible as wet conditions persist. This strong performance supports Australia's total wheat production, forecasted at 31.8 mmt, a 23% year-on-year (YoY) increase, and eases global supply concerns amid escalating Black Sea geopolitical tensions.

Canada

Canada's Wheat Production and Export Outlook for 2024

According to Cereals Canada, Canada's wheat production for 2024 is projected at 34.3 mmt, marking a 4% YoY increase and 8% above the five-year average. The country produced a high-quality crop with above-average yields, strengthening its position as a global leader in premium wheat exports. High-quality wheat exports are expected to reach 25.4 mmt, maintaining Canada as the world's third-largest wheat exporter for the second consecutive year and the top exporter of high-protein wheat.

Paraguay

Paraguay's Wheat Exports Surged in 2024

Paraguay's wheat sector is thriving, with exports driving a 123% YoY increase in foreign exchange earnings from Jan-24 to Oct-24, totaling USD 106 million. Export volumes surged to 450,621 metric tons (mt), a significant rise from 160,594 mt in the same period last year. The 2024 harvest, which began on Oct-24, contributed 93,761 mt, up sharply from 17,279 mt in the same period in 2023. This growth is due to increased production, estimated at over 1 mmt. Brazil remains the primary market, accounting for 99% of exports, followed by Bolivia and Vietnam, with 25 companies handling the shipments.

Russia

Russia's Wheat Exports to China Surge

China's imports of Russian wheat surged 3.4 times YoY from Jan-24 to Oct-24, reaching USD 84.2 million, making Russia China's third-largest wheat supplier after Canada and Kazakhstan. Russia supplies only spring wheat and barley to China but is working to gain approval for winter wheat and barley exports, potentially broadening its market access.

2. Weekly Pricing

Weekly Wheat Pricing Important Exporters (USD/kg)

Yearly Change in Wheat Pricing Important Exporters (W47 2023 to W47 2024)

Russia

In W47, Russian wheat prices remained stable week-on-week (WoW) but declined by 4.17% month-on-month (MoM), reaching USD 0.23 per kilogram (kg). The 2025 wheat harvest forecast was revised upwards by 1.5 million tons to 81.6 mmt, primarily due to a revised winter wheat forecast, now expected to reach 54.3 mmt. This increase is due to a higher harvested area of 15.43 million hectares (ha) and an improved yield forecast of 3.52 mt/ha, driven by favorable growing conditions in Southern Russia. The forecast for spring wheat production remains unchanged at 27.3 mmt. Moreover, prices dropped due to low international demand and new export regulations to control domestic prices.

United States

In W47, United States (US) wheat prices increased by 4.17% WoW, reaching USD 0.25/kg. The United States Department of Agriculture's (USDA) latest crop progress report raised concerns about the condition of US winter wheat, with only 38% of the crop rated as good or excellent, a decline from 47% in 2023 and below the five-year average of 43.4%. This is one of the lowest ratings for this time of year, just above 2022 levels. Persistent drought is the leading cause, affecting the winter wheat region as of October 24. Adding to market uncertainty, a surging dollar index and concerns over the potential effects of a Sino-American trade war and biofuel policies under the US president-elect have influenced wheat prices. The White House's decision to lift restrictions on Ukraine's use of US missiles also raised concerns about the stability of the Black Sea region. This central wheat-producing area contributed to a rise in soybean and corn futures.

France

In W47, French wheat prices increased by 4.55% WoW, reaching USD 0.23/kg, up from USD 0.22/kg in W46. The IGC reduced its global wheat production forecast for the 2024/25 season from 818 mmt to 796 mmt, mainly due to decreased production in the EU, particularly in France. The EU's wheat production is now expected to be 1.5 mmt lower than the previous forecast in Oct-24. The price increase is mainly due to poor harvest conditions in France, where heavy rainfall has negatively impacted crop quality and yields. Also, strained diplomatic relations with Algeria, worsened by France's recognition of Morocco's sovereignty over Western Sahara, have significantly reduced Algeria's wheat imports from France. As a result, France's soft wheat production for 2024/25 MY is expected to decrease from 4 mmt to 3.9 mmt. Furthermore, heightened competition from Argentina and Australia, entering their harvest seasons in the Southern Hemisphere, intensified market pressure on French wheat exports.

Ukraine

In W47, Ukrainian wheat prices remained steady WoW and MoM at USD 0.24/kg but increased by 20% YoY. The YoY rise primarily stems from concerns about drought conditions affecting winter wheat planting for the 2025 harvest. The ongoing war and challenging weather have reduced the area sown for winter wheat in Ukraine, with an estimated 4.2 million ha planted in 2024, down from 4.4 million ha the previous year. The smaller expected harvest and reduced carryover stocks will likely limit the country's exportable surplus and put upward pressure on prices as global demand remains strong.

3. Actionable Recommendations

Diversify Wheat Sourcing to Mitigate Supply Disruptions

Given the increasing risks from geopolitical tensions and adverse weather patterns (such as the EU’s diminished wheat harvest), businesses must diversify their wheat sourcing. Relying too heavily on any single region, like the EU, could lead to significant supply disruptions. By establishing contracts with reliable wheat producers in countries like Canada, Australia, and Russia, regions projected to have strong harvests, businesses can reduce their exposure to potential shortfalls. Additionally, emerging markets like Paraguay are seeing strong export growth and could provide more stable alternatives to traditional suppliers. Diversifying suppliers ensures a continuous and more reliable wheat supply, especially during times of uncertainty.

Invest in Advanced Weather Forecasting and Crop Monitoring Technologies

As seen this year, weather patterns significantly impact crop yields, with issues like drought in the US and heavy rainfall in the EU. These factors can dramatically alter the availability of wheat and its price. Investing in advanced weather forecasting and crop monitoring technologies enables businesses to anticipate weather challenges early and make proactive adjustments. These technologies provide insights into potential crop stress or damage, helping farmers and traders decide on actions such as adjusting irrigation schedules, altering harvest timelines, or even shifting purchasing decisions. Businesses can reduce the risk of poor crop yields and protect their supply chain from unexpected weather events, leading to more consistent pricing and availability.

Strengthen Strategic Export Partnerships

As competition for global wheat markets intensifies, particularly with increased wheat exports from Russia and Canada, strengthening export partnerships becomes crucial. Long-term relationships with vital wheat-exporting nations can provide businesses with reliable supply agreements, helping to stabilize prices and ensure consistent product availability. Moreover, emerging wheat exporters like Paraguay offer promising new markets and reduce dependency on traditional sources. By forging stronger logistical and financial partnerships with these exporters, businesses can mitigate the risk of supply disruptions, improve their bargaining power, and tap into new growth opportunities. This diversification of export partnerships enhances market resilience and competitiveness.

Sources: Hellenic Shipping News, Agromeat, UkrAgroConsult, Foodmate