As of January 4, 2025, wheat prices have continued their downward trend, with March soft red winter wheat dropping 16-1/2 cents to $5.29-1/4 per bushel, marking a life-of-contract low of $5.27-1/2 [61cf44ad]. This decline is part of a broader pattern affecting Chicago agricultural futures, which also saw soybean futures fall by 20-1/4 cents and corn decrease by 8-3/4 cents [61cf44ad].
The ongoing decrease in wheat prices is largely attributed to significant farmer sales in the U.S. and South America, which have pressured futures [61cf44ad]. Additionally, the strengthening U.S. dollar has impacted wheat prices, making U.S. exports more expensive for foreign buyers and contributing to a decrease in demand [00eb6285][61cf44ad].
Recent export sales data has also played a role in shaping market sentiment. Weekly export sales for wheat totaled 140,600 metric tons, falling short of the 200,000-500,000 metric ton estimate, while corn and soybean sales also missed expectations [61cf44ad]. Analysts have pointed out that earlier price increases were not justified based on these fundamentals, suggesting that the market may be adjusting to more realistic valuations [61cf44ad].
In contrast, Argentina's wheat harvest for the 2024/25 season has concluded with a total yield of 18.6 million tonnes, representing a 23% increase from the previous cycle. This growth was supported by favorable weather conditions, which allowed for a 7% increase in the planted area to 6.3 million hectares [9015d3c7]. Currently, 45% of this harvest has been sold, leaving over 10 million tons still in the hands of producers [9015d3c7].
The economic impact of Argentina's wheat harvest is significant, with exports projected to reach nearly US$2.9 billion, a 49% increase year-on-year, and a fiscal contribution estimated at US$926 million, up 20% from the previous year [9015d3c7]. While there are no restrictions on export quotas, export duties have been reduced from 12% to 9.5%, although uncertainty remains regarding the sale of the remaining wheat due to current price levels and duties [9015d3c7].
Despite these bearish trends in the U.S. market, there are factors that could provide support for wheat prices. A smaller crop forecast from Russia, the world's largest wheat exporter, has been noted, with SovEcon reducing Russia's 2025 production forecast to its lowest level since 2021 [00eb6285]. As trading resumes next week, analysts expect volatility to decrease, potentially stabilizing the market as it reacts to these developments [61cf44ad].