Wheat market in MY 2022/23: current issues and forecasts

The world market is witnessing a trend towards building up strategic stocks – its major importers have stepped up wheat purchases amid geopolitical instability, increasingly frequent droughts in the world’s key grain-producing regions, and the consequences of the coronavirus epidemic.

The new harvest in the Southern Hemisphere is drawing to an end. It is already officially over in Argentina, though still ongoing in Australia (rains in the southeast slightly slow its progress). Some players are making attempts to influence the price by stressing on the poor quality and a reduced portion of food grain in the Australian crop due to excessive soil moisture. Nevertheless, one should keep in mind that the wheat for export comes mainly from Western Australia, where precipitation rates in the period of wheat ripening were closer to normal.

As a rule, world market prices seasonally lower at this time of year. A new round of their growth usually happens in April, amid gradually exhausting old-crop stocks and due to a possible deterioration of weather conditions for new-crop winter wheat in Northern Hemisphere countries.

Given the fact that many importers have already stockpiled much wheat and because enough supply is still available from the bumper harvests of Australia and russia, we can expect the downward price trend to continue over the next few months, unless new risks (primarily geopolitical ones) emerge.