Wheat futures suffered their worst trading week in about a year as the coronavirus fallout continues to impact the global economy and affect demand levels. According to analysts, traders are waiting for countries to lift their virus-related restrictions to determine real demand volumes for wheat. Until this happens, it could be difficult to gauge the market.
July wheat futures rose $0.0475, or 0.9%, to $5.3525 per bushel at 19:18 GMT on Friday on the Chicago Board of Trade (CBoT). Wheat prices settled the trading week 4.1% lower, adding to their year-to-date losses of 4.35%. It is still up from its 2020 lows as panic-stricken consumers stocked up on wheat products late last month and elevated prices.
For now, production levels and inventory numbers are driving the wheat market in the near-term.
A new report noted that the European Union would experience an increase in soft wheat stockpiles due to lower overall demand. Analysts appear to have abandoned their bearish forecasts for US wheat as concerning weather patterns in key growing areas across the Plans seem to have abated. Canadian exports fell to 368,000 metric tons last week.
Elsewhere around the world, Japan’s Ministry of Agriculture announced it purchased 132,277 tons of food-quality wheat from the US, Canada, and Australia. Germany estimates its wheat production will decline by 1.4% due to a paucity of rain. Romania removed all of its wheat export restrictions. Experts anticipate Indonesia’s wheat imports to fall in the coming months, while Iran could see a strong wheat harvest this marketing year.
Last week, the US Department of Agriculture (USDA) confirmed that soybean export sales came in at 304,700 tons, which is below analysts’ forecasts of at least 375,000 tons. If the US agriculture industry sees more volatility in soybeans, then it could be offset by a bullish wheat market. The USDA also recently confirmed that most wheat crops were rated in good to excellent condition for the 2020-2021 marketing year.
In other agricultural commodities, May corn futures picked up $0.0325, or 1.02%, to $3.23 per pound. May soybean futures fell $0.0425, or 0.5%, to $8.415 a bushel. June orange juice futures dropped $0.007, or 0.75%, to $1.067 per pound.