Favourable growing conditions for soybeans and corn in the United States had those commodities trading at their weakest levels in four years in early August. The bearishness spilled into the Canadian canola market as well.
The three U.S. wheat futures markets also traded near some of their weakest levels in years but there were signs that wheat at least was establishing a bottom.
The U.S. winter wheat harvest is in its final stages, but untimely rains in Europe delayed harvest operations in France and Germany. After excessive moisture earlier in the growing season, French wheat production could be the smallest of the past 40 years. Ukrainian and Russian wheat production also failed to live up to expectations, opening the door further for North American wheat exports in the 2024/25 marketing year.
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Quality of the European crop was also compromised by wet conditions during harvest. The falling number from wheat crops in Germany and France is low and a significant portion of the crop is not suitable for export, further limiting overseas potential.
Wheat exports from Russia and Europe combined could be down by about 11 million tonnes on the year, according to the latest data. That reduction should help stabilize wheat markets and shift the global flow of wheat.
Canada exported 21.15 million tonnes of wheat in 2023/24, according to Canadian Grain Commission data. That was up from 19.67 million tonnes the previous year. However, durum movement dipped to 3.45 million from 5.10 million in 2022/23.
Looking at a spring wheat chart, the Minneapolis December contract was hovering just above US$6 per bushel in mid-August. It tested that key chart point on several occasions but has yet to close lower. For the more active Chicago soft wheat market, the level to watch in the December contract is $5.40 per bushel.
While wheat may find independent strength, the bearish anchor nearby may be the corn market. December corn fell below $4 per bushel and could be headed toward $3.50 if no problems develop with the U.S. crop.
