During trading on November 11th, the contract for SRW wheat on the Chicago exchange dropped to $5.52/bushel ($203/ton). This is the lowest level since September 3rd. Quotations decreased to a two-month minimum due to wet weather in the USA and the strengthening of the dollar, as reported by the analytical center SovEcon.
Over the weekend, 20-40 mm of precipitation fell in Kansas, which compensated for the moisture deficit accumulated in recent months. Kansas is the main wheat producer in the USA.
Possibly, the strengthening of the US dollar also influenced the quotations. On Monday, the American currency index closed at 105.5 (+0.5% compared to Friday). This is the highest level since July 2024.
The export of Russian wheat is also putting pressure on global prices. In November, the export is estimated by the analytical center SovEcon to range from 3.7 to 4.1 million tons, which is more than last year (3.2 million tons) and higher than the average for the past five years (3.5 million tons).
In most European countries, dry weather persists, causing wheat sowing rates in France to approach average values. Precipitation occurred in the southern regions of Russia, improving the prospects for the winter wheat crop.
Allegedly, the improvement of relations between Russia and Ukraine could also have influenced the quotations. According to Western media, US President-elect Donald Trump contacted the President of the Russian Federation to settle the conflict in Ukraine. However, the information about the call was denied by the Kremlin.
“The transmission of better forecasts for the new wheat crop, as well as rumors of negotiations between Russia and Ukraine, may exert pressure on prices in the near future. Moreover, considering the current reserves and their relation to global demand, wheat prices are fundamentally low at the moment. There is also a possibility that the market may reassess the prospects for Russian exports in the current season,” analysts report.