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Global wheat market: Wheat prices mostly continued to rise in 2022

 Last Update: 2023-02-02
 Source: Internet
 Author: User

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Foreign media news on January 3: In the week ending December 30, 2022, global wheat prices rose and fell
together.
Wheat prices mostly rose throughout the year, mainly due to the weaker outlook for wheat production due to unfavorable weather in major global producing countries, including the United States and Argentina; Black Sea wheat exports were disrupted after the outbreak of the Russian-Ukrainian conflict, briefly boosting wheat prices to a 14-year high
.
But with Ukraine's resumption of exports under a UN-brokered agreement, and Russia's wheat production hitting a new high of 100 million tons, exporters continue to cut prices and promote them, leading global wheat prices to fall
.
Abundant wheat productions in Australia and Canada have also helped ease supply concerns
.

Chicago Board of Trade (CBOT) March soft red winter wheat futures closed at about $7.
92 a bushel on Friday, up 2.
1 percent
from a week ago.
Kansas City Futures Exchange (KCBT) March hard red winter wheat futures closed at about $8.
88/bu, up 1.
5 percent
from a week ago.
The Minneapolis Grain Exchange (MGEX) March hard red spring wheat futures closed at about $9.
3875/bu, up 0.
75%
from a week ago.
Euronext's March 2023 futures closed at around Eur309.
25/mt, down 0.
8% from a week ago; Argentine wheat spot quotations were $380/mt, down 1.
8%
from a week ago.

U.
S.
wheat crop conditions have been hit by a drought and a cold snap

The recent polar storms in the Great Plains and Midwest of the United States have caused concern for damage to snow-covered winter wheat crops, as pre-winter winter wheat crop conditions have fallen to their worst levels in history due to drought, which could lead to a worse outlook for U.
S.
wheat supplies and exacerbate global supply constraints
.

Russia's wheat production is huge, but production is expected to shrink next year

This year, Russian agriculture has had a bumper harvest, with more than 150 million tons of cereals and more than 100 million tons of wheat, and the huge export supply has prompted exporters to constantly lower their offers to attract more buyers
.
Consultancy SovEcon raised Russia's 2022 wheat production estimate to 101.
2 million mt from 100.
9 million mt as yields in central and Siberia improved
slightly.
SovEcon raised its 2023 wheat production forecast for Russia to 86 million mt, up 400,000 mt from earlier expectations due to good planting conditions after heavy rains
.
On December 13, Russia's Ministry of Agriculture forecast wheat production of 80 million to 85 million tons in 2023, and total cereal production is expected to reach 125 million to 127 million tons
.

Argentine wheat production is likely to be revised down further

Argentina's wheat production in 2022/23 is expected to be 11.
5 million mt, half of the previous year's output of 23 million mt, and will also be the lowest since 2014/15 (10.
9 million mt), as yields are expected to fall to their lowest level
since 2008/09, according to the Rosario Grain Exchange (BCR).
The exchange expects Argentina to export only 6 million mt of wheat in 2022/23, of which 5.
5 million mt is milled wheat.

Domestic wheat prices in Argentina have soared to their highest level
in 10 years.
The exchange expects Argentine wheat ending stocks in 2022/23 to be 1.
72 million mt, the lowest level in five years
.
Wheat ending stocks in 2017/18 were 1.
2 million tonnes
.
Domestic wheat consumption is also expected to fall to 5.
5 million mt due to reduced wheat production, also a five-year low
, the exchange said.

The Buenos Aires Grain Exchange said on Thursday that Argentina's wheat production forecast for 2022/23 may need to be further lowered due to lower-than-expected
yields.
The exchange is currently forecasting wheat production of 12.
4 million mt, down from an initial forecast of 20.
5 million mt
.
As of 28 December, the wheat harvest had been completed on 91.
4 per cent
of the planned area of 6.
1 million hectares.

Global milling wheat supplies are likely to remain tight

Global wheat inventories are likely to remain tight
in 2023.
Currently, from the United States to Argentina, the outlook for winter wheat crops is being damaged
by severe weather.
The conflict in Ukraine also means a sharp decline in cereal production in 2023, with exports estimated to be only a fraction of
previous years' levels.

In the United States, durum red winter wheat, which accounts for 40 percent of U.
S.
wheat, is threatened by dry weather and is in worse crop conditions than last year, when yields were already 15 percent
below the 10-year average.

In Argentina, wheat crops are affected by La Niña-related dry weather for the third consecutive year, and wheat exports could be cut in half
from last year.
Australia, another country in the Southern Hemisphere.

While wheat production is expected to reach a record high, too much rainfall on the east coast could reduce wheat quality, resulting in abundant supply of feed wheat and tight supply of milling wheat
.

In India, wheat production is expected to be bumper as record domestic wheat prices boost wheat acreage
.
After cutting production in 2022 due to the March heatwave, India is on track to achieve a bumper wheat yield
in 2023.

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