Euronext wheat futures break €400/mt barrier on bullish Wasde

12 May 2022 | Sharon Levrez

European milling wheat futures finally broke through resistance at €400/mt Thursday, following the release of the USDA’s monthly Wasde report, with all four front contracts topping the psychologically important mark.

September 2022 hit a high of €416/mt, up €13/mt on the previous day’s settle, before easing back to €413.50/mt by 1800 CET.

December 2022 rose as high as €409.25/mt, March 2023 €405.75/mt and May 2023 €400.75/mt, up €12.5/mt, €12.25/mt and €11/mt respectively.

One trader called the move historic, adding “and it’s not over yet!”

Thursday’s Wasde predicted reduced supplies, exports, domestic use stocks for wheat in the US, and higher prices in its first forecasts for the 2022/2023 marketing year.

“US 2022/23 wheat supplies are projected down 3%, as lower beginning stocks more than offset a larger harvest,” it said.

“Total 2022/23 domestic use is projected down 1% on lower feed and residual use more than offsetting higher food use. Exports are projected at 775 million bushels, down from revised 2021/22 exports and would be the lowest since 1971/72.”

It put Russian wheat production for 2022/2023 at 80 million mt, up from 75 million mt in 2021/22 and exports at 39 million mt, up from 33 million mt, while for Ukraine it predicted production at 20.5 million mt, 11.5 million lower than in 2021/22 and exports at 10 million mt, down from 19 million.

“They cut quite strongly the US crop, but I am surprised by the high numbers they released for Ukraine and Russian exports,” another market source said.

“Even 10 million mt for just wheat seems high to me for Ukraine.”

US wheat futures also climbed following the report, with July and September Chicago SRW trading 30 c/bu higher at $11.466/bu and $11.502/bu respectively as of almost 1300 ET.

Kansas KC wheat as up 43-44 c/bu at $12.446/bu for July and $12.466/bu for September.