Despite new forecasts from the US Department of Agriculture last week, wheat prices continue to hover near their lowest levels, with no fresh indicators to explain the ongoing weakness.
The outlook for the US wheat harvest in the upcoming 2025-26 crop year has been steadfast, with initial forecasts remaining consistent despite various global market dynamics.
Tighter supply
However, a notable adjustment has been made to the projections for US wheat ending stocks for the same period.
These ending stocks, which represent the amount of wheat remaining at the close of the crop year after all demand has been met, have been revised slightly downward. This minor but significant revision suggests a potentially tighter supply situation than initially anticipated within the US.
Furthermore, this downward revision in ending stocks is not an isolated event. Similar adjustments have been observed in other major wheat-exporting countries around the world.
This widespread trend across key global suppliers collectively points to a potentially reduced availability of wheat on the international market.
“However, headwinds came from falling corn prices, which were under pressure due to the USDA’s significantly upwardly revised forecast for the US crop,” Carsten Fritsch, commodity analyst at Commerzbank AG, said in a report.
This increases competition for wheat in the animal feed sector.
Bearish sentiment from Germany
Meanwhile, bearish sentiment for wheat prices emerged from Germany due to unexpectedly strong harvest results.
The German Cooperative Association (DRV) reported a projected wheat harvest of 22.4 million tons, a significant 20% increase over last year’s yield.
This forecast also represents an upward revision of almost 1 million tons from the July estimate.
Crucially, concerns about potential damage from rainfall during the harvest period proved to be less severe than anticipated, contributing to the positive outlook and subsequently pressuring wheat prices downwards.
While there has been a slight decline in quality characteristics like protein content and Hagberg falling numbers, the deterioration is not as severe as initially anticipated, Fritsch said.
A conclusive assessment cannot yet be made, as the harvest is still in progress, as noted by the DRV.
Fritsch said:
We consider the current weakness in wheat prices to be exaggerated and expect a recovery soon.
Soybean prices jump
Meanwhile, soybean prices experienced a notable increase last week.
This surge was primarily driven by the US President Donald Trump’s optimistic outlook on a substantial rise in soybean purchases by China, coupled with the USDA’s unforeseen reduction in its US crop forecast, said Fritsch.
The primary reason for the unexpected rise in projected corn acreage was a corresponding reduction in soybean acreage.
Despite an upward revision of yields per acre, the US crop volume is now anticipated to be slightly lower than previously expected, at just under 4.3 billion bushels. This is because the revision was insufficient to offset other factors.
Fritsch added:
We consider Trump’s optimism regarding China’s soybean purchases to be overblown, which is why at least this aspect of the strong prices should not last.
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