Wheat Futures
Wheat prices have taken a steep and persistent dive in recent months, driven by shifts in the delicate balance between supply and demand. As of now, wheat is scraping close to its lowest market value since July of this year, clocking in at $620. Shockingly, this represents a deep plunge of 52% from the highest peak observed in 2022. Investors and consumers alike are following these developments with great interest as the future of the wheat industry remains uncertain.
Syria Harvest
Syria’s Kurdish-led Autonomous Administration is gearing up for a bountiful wheat harvest this year, with expectations of producing over a million tons of the cereal crop. The AA’s Minister of Agriculture shared the news that this will be a significant increase from last year’s yield. Wheat will be used to meet the demands of the population, which consumes around 750,000 tons annually. Such a promising harvest could bring much-needed relief and stability to the breadbasket region of the country’s northeast.
As the Syrian conflict continues, more and more people are struggling to access affordable food. Wheat, a key staple in the Syrian diet, has become increasingly expensive, with prices skyrocketing since the start of the Ukraine war in 2022. The World Food Programme (WFP) reports that over half of Syria’s population is now food insecure, leaving many families struggling to make ends meet.
Despite this dire situation, there is some hope on the horizon. The United Nations Food and Agriculture Organization (FAO) predicts that this year’s wheat harvest will see a marked increase compared to the past two years, both in areas controlled by the AA rebels and the Syrian regime. However, this boost in production may not be enough to fully address the issue, especially as climate change and rising input costs continue to pose challenges to farmers and food producers.
Overall, the situation in Syria is one that demands attention and action from the international community. With so many people facing food insecurity on a daily basis, it is crucial that we work together to find solutions and provide support to those in need.
A drastic decrease in wheat imports is expected in regime-held areas of Syria this year. This is due to a record harvest in AA-controlled regions, which produce over two-thirds of the country’s wheat. The bidding war between the regime and AA for farmers’ wheat sales has reached a new level this year, with AA’s offer of US$0.43 per kilo significantly higher than the regime’s meagre US$0.25 cents per kilo. As a result, regime-held areas will suffer from a significant decrease in wheat imports this year.
Australian Wheat
Australia, one of the world’s largest wheat exporters, is bracing for a significant drop in winter crop production, particularly in wheat output, which is projected to decline by over 30%. Analysts attribute this decrease to the El Nino weather pattern, which has caused dryness throughout the country.
With Asia, including major buyers China, Indonesia, and Japan, relying heavily on Australian wheat exports, the expected 34% fall in winter crop production could have far-reaching economic repercussions.
The June crop report from the Department of Agriculture, Fisheries and Forestry predicts a total production of 44.9 million tonnes in 2023–24, which is 3% lower than the 10-year average to 2022–23 of 46.4 million tonnes.
Last Week’s Commodities Recap
The trading week began with a decline in corn and soybean futures due to the weakening of export demand for US supplies. However, wheat futures saw some gains, particularly with hard red winter and hard red spring contracts as traders weighed in on concerns over dry soils potentially cutting harvests in key growing areas of Europe and the Black Sea region.
With tight global stocks of high protein supplies, the wheat market looks promising. July corn futures took a hit, dropping 11½¢ to $5.97½ a bu. On the other hand, Chicago July wheat added 5¢ to close at $6.24 a bu, while Kansas City July wheat jumped 10¢ to close at $8.22¼ a bu and Minneapolis July wheat increased by 12½¢ to close at $8.20¼ a bu.
July soybeans, however, fell by 2½¢ to close at $13.50 a bu. The market for July soybean meal did see standout gains, adding $3.40 per ton to close at $401.20. On the other hand, July soybean oil was down 0.24¢ to close at 49.26¢ a lb.
Author Profile
- Lucy Walker covers finance, health and beauty since 2014. She has been writing for various online publications.
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