The United States Department of Agriculture (USDA) released weekly shipment figures for soybeans, corn, and wheat. US wheat shipments failed to meet the forecasted volume of 350 thousand to 550 thousand tons, totaling only 264.6 thousand tons, notably lower than the projected range.
Argentina's wheat production for 2023/24 increased by 23.8%, reaching 15.1 million metric tons (mmt), but was 15.6% lower than the last five cycles due to lack of humidity. The average yield was 28.4 yield per hectare (q/ha), higher than the previous cycle but lower than the five-cycle average. A projected 29% drop in wheat prices could reduce economic contribution by 9% by 2024.
Moreover, Argentina plans to export wheat to China, with authorized Argentine companies in the online quarantine registration system of the General Administration of Customs of the People's Republic of China (GACC). A major wheat importer, China primarily sources from Australia and Canada.
Due to increased planting area and favorable soil moisture levels, Ukrainian wheat production is expected to exceed 20 mmt despite decreased snow cover. Winterkill risk remains low due to warmer weather forecasts. Grain exports from Ukraine's Black Sea ports reached 4.8 mmt in December, surpassing United Nations-promoted grain corridor volumes. Despite smaller harvests, the post-war harvest is relatively good, and high exports have been bearish for futures contracts.
According to the national statistical office, Croatia witnessed a 14.2% year-on-year (YoY) decrease in its soft and hard wheat production in 2023, amounting to 813 thousand metric tons (mt). Moreover, the European Union (EU)’s soft wheat harvest is predicted to decrease by 1% YoY due to warm weather and lack of snow cover in Western Europe. This could potentially damage winter wheat crops.
Due to reduced export rates, Russian wheat supplies in Jan-24 are expected to decrease by 13% YoY, totaling around 3.7 million tons. This could lead to high stocks and a spring export volume surge. However, wheat reserves are slightly lower than in 2023, with a surplus in the South due to a drop in exports in Nov-23 and Dec-23.
Moreover, Russia plans to raise its export duty on wheat, barley, and corn from February 7 to 13, 2024. The duty on wheat will increase to USD 42.03/ton (RUB 3,804.6/ton), barley to USD 9.14/ton (RUB 827/ton), and corn to USD 14.80/ton (RUB 1,339.8/ton). These adjustments correspond to indicative prices of USD 251.1/ton for wheat, USD 190.9/ton for barley, and USD 199.1/ton for corn. The generated revenue from these duties will subsidize domestic grain producers.
According to the Wheat Research Authority of India, India is predicted to have a high wheat harvest this year due to cold weather in central and northern regions, potentially exceeding 3.5 tons/ha and reaching its target of 114 million tons. However, sudden temperature increases could negatively impact yields.
Kazakhstan's wheat harvest in 2023 decreased by 26% YoY, yielding only 12.11 million tons. Despite a 2.5% increase in wheat crop area, major grain-producing regions like Akmola, Kostanay, and North Kazakhstan experienced substantial reductions in their gross wheat harvest.
The Iraqi Ministry of Agriculture predicts a wheat harvest of 6 million tons for the 2023/24 season, surpassing the USDA's Jan-24 estimate of 4.2 million tons. The Department head of the Iraqi Ministry of Agriculture also noted Iraq's self-sufficiency in wheat production in 2023.
Pakistan has banned wheat imports due to its sufficient grain reserves and stable flour prices, approved by the Economic Coordination Committee of the Cabinet of Ministers. Pakistan is among the top five wheat importers from Russia, Türkiye, Egypt, Bangladesh, and Algeria.