Global Agricultural Market Declines Amid Supply Factors and Position Adjustments

The global agricultural market saw a simultaneous decline, with seven commodities experiencing price drops. Wheat was the group with the sharpest decline, falling 1.6% to $231.5/ton and 2% to $256.9/ton in Chicago and Kansas, respectively.

The Vietnam Commodity Exchange (MXV) reported that wheat accounted for 20% of the total market trading value. Supply factors and position adjustments by speculators ahead of the US Department of Agriculture's (USDA) World Agricultural Supply and Demand Report (WASDE) are also putting pressure on prices in the short term.

In the U.S., the winter wheat harvest is nearing completion, with 91% of the acreage harvested as of August 11. Spring wheat planting has reached 24% of the acreage, higher than the five-year average. However, spring wheat quality ratings have declined slightly due to hot weather.

In the Black Sea region, harvesting is also progressing rapidly. Russia had harvested over 60 million tons of wheat from 14.8 million hectares as of August 10, an increase of approximately 6 million tons compared to the same period last year. Ukraine's grain production reached 26.13 million tons from 4.9 million hectares, with yields in some key regions reaching nearly 7 tons/ha.

The consulting firm IKAR recently lowered its forecast for Russia's 2026 wheat production to 90 million tons and exports to 44.5 million tons. These figures are still lower than the 47.5 million tons of exports projected by the USDA. Export prices in the Black Sea region are also putting pressure on US wheat, with Russian wheat (12.5% protein) falling to $225/tonne and Ukrainian wheat (11.5% protein) dropping to $222/tonne.