Is Russia running out of wheat supplies?

The September wheat contract on the Matif closed yesterday at €2,75 at €209,25 per tonne. On the CBoT, wheat also took a step back, closing 0,8% lower at $5.45 per bushel. Corn closed slightly higher, up 0,4% to 4.63 per bushel. Soybeans were also in the green, closing 0,5% higher at $10.67¾ per bushel.

The International Grains Council (IGC) has increased the total grain harvest by 2 million tonnes compared to the forecast in April to 2.375 million tonnes in its latest crop estimate. The IGC predicts higher yields than previously calculated for the EU, Argentina and the US, among others. Grain consumption has been revised downwards by 1 million tonnes to 2.372 million tonnes.

Production for 2025/26 has remained the same as the previous forecast at 806 million tonnes. Consumption has been reduced by 1 million tonnes to 813 million tonnes. If the forecast comes true, this would be the third season in a row in which demand for wheat exceeds production. For soybeans, the harvest is estimated at 428 million tonnes and consumption at 429 million tonnes. Here too, a deficit on the balance sheet. For corn, production at 1.277 million tonnes is greater than demand, which is estimated at 1.268 million tonnes.

The IGC grain index is under pressure this month, mainly due to the large positions in corn due to windfalls in Brazil and the US, the IGC writes. The corn index has fallen by 4%. Wheat has remained virtually the same, but compared to this period last year, wheat prices are 11% lower.

End of minimum export price
Russia is abolishing the minimum export price of $1 per tonne for wheat as of 250 July, according to various sources. The Kremlin is reportedly doing this to ensure that the last remnants of the past harvest are gone before the new harvest really gets going. Much more of the 2024 harvest could already be gone than we think, according to some analysts. Exports have fallen sharply.

The Russian news agency Interfax reported yesterday, based on information from the Russian Grain Union, that 1 million tons of wheat were exported in the period from 20 to 1,2 May. Exports in the same period a year earlier were 3,3 million tons. The five-year average for Russian wheat exports is 2,6 million tons. The Grain Union estimates that 1,8 million tons of wheat will be exported in May this year.

Rain is not always a blessing
In the US state of Illinois, winter wheat is doing relatively well. At least that is what the Illinois Wheat Association writes after the Crop Tour. The average yield of the 89 plots visited in the tour is 106 bushels per acre (approximately 7,1 tons per hectare). That is slightly above the result in the Crop Tour last year, when the average yield was estimated at 104 bushels per acre. Incidentally, the USDA expected a wheat harvest of 85 bushels per acre in the state of Illinois earlier this month. 2023 was the record harvest in the state with an average of 87 bushels per acre (approximately 5,9 tons per hectare). The large differences between the USDA and the Crop Tour are because only a limited number of plots are visited in the latter. "But the tour does make it clear that the potential for a top yield is there," writes Jessica Rutkoski of the University of Illinois and participant in the tour. With wetter conditions at the end of the growing season, a top yield is not yet assured, according to Rutkoski. "Fusarium head blight is a pretty big problem in southern Illinois where most of the wheat is grown," Rutkoski says.

The rain is shrinking the dry areas in the US, the latest drought monitor shows. Only 29% of spring wheat is in a dry region, compared to 38% last week. In the winter wheat areas, the decline is less spectacular, with 2% to 21% of the area in a dry area.