Old crop wheat prices remain under pressure. UK wheat futures (May-24) have lost over 14% since the start of 2024 and pressure on the market continues to mount. Big global demand is still lacking, with demand in North Africa and Southeast Asia currently subdued on hopes that grain prices will fall further.

Wheat futures in Paris also edged lower to compete on the export scene with Russian grain. In this context, the EU has exported 18.2 million tons of common wheat by January 28, with exports expected to reach 31 million tons. This means that between the end of January and June, another 12.8 million tonnes must be exported, which is a risk to the ending stocks and balance in the EU. However, in order to export this grain, prices must be competitive with other origins, such as Russian wheat.

Russia's market share has been growing with large production over the past few years. Last week it was reported that their wheat price had fallen further, lowering the threshold for global wheat prices.

In addition, quarterly official data showed that the level of wheat stocks in Russia was at a record high. As of January 1, 2024, stocks were pegged at 36.5 million tonnes, up 1% year-on-year (SovEcon, LSEG). In addition, Russia's Ministry of Agriculture proposes to increase the grain export quota (until June 30) to 28 million tons, an increase of 4 million tons from current volumes.

The latest SovEcon data put February grain exports (wheat, barley and maize) at 3.7 million tonnes, down from 4.6 million tonnes the previous month. But 3 million tons of this total export consists of wheat, a circumstance that weighs on the international. Scene.

If the February figures are as expected, Russia will have exported 33.1 million tonnes of wheat so far, with exports expected to reach nearly 50 million tonnes for the 2023/24 marketing year.

With all this information and the lack of a clear weather forecast in South America, grain prices will most likely remain under pressure.