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Recently, global wheat prices have risen mainly due to the poor condition of winter wheat crops in Russia, and the market continues to absorb the impact of the Russian government's reduction of export quotas and increase in export tariffs; On the contrary, the large scale of wheat production being harvested in the southern hemisphere, with year-on-year increases in wheat production in Australia and Argentina, has constrained the rebound space of the wheat market. For our country, we have another bumper wheat harvest this year, and the import quantity has shown a downward trend this year. The proportion of imported wheat in our total wheat supply is not large. At present, the factors affecting wheat prices in China are still policy storage and the improvement of domestic demand. In the future, the focus will be on the strength and sustainability of storage policies, as well as the improvement of downstream demand during the "double festival" period.
The export quota for Russia and wheat has been significantly reduced
According to foreign media reports, the Russian government has reduced the export quota from February 15 to June 30, 2025 to 11 million tons, far lower than the previous year's 29 million tons, which will significantly limit the export capacity of Russian suppliers. The Analysis Center of the Russian Agricultural Transport Company predicts that the export volume of wheat in the Black Sea region will decrease by 21% year-on-year in 2024/25, from 106 million tons to 84 million tons. At the same time, the import demand of North Africa and the Middle East (Egypt, Algeria, Morocco, Türkiye, Saudi Arabia, Iran) stabilized at 39 million tons, slightly lower than the 41 million tons of the previous year. In the first five months of this year (July to November 2024), only about 16 million tons were imported, mainly from Black Sea countries. The Ukrainian Ministry of Agriculture stated that as of December 11, the grain export volume of Ukraine for the 2024/25 fiscal year (starting from July) was 19.089 million tons, higher than 18.584 million tons a week ago and an increase of 4.39 million tons from 14.697 million tons in the same period last year. So far this year, 9.13 million tons of wheat have been exported, compared to 6.296 million tons in the same period last year. The grain export volume of Ukraine in the fiscal year 2023/24 (starting from July) was 50.826 million tons, an increase of 3.2% compared to the previous crop year's 49.236 million tons. The export volume of wheat was 18.402 million tons, compared to 16.894 million tons in the previous year.
Australian wheat production increases, Argentine wheat production exceeds expectations
The quarterly report released by the Australian Bureau of Agriculture, Resources, Economics and Sciences (ABARES) on Tuesday shows that wheat production for 2024/25 will reach 31.9 million tons, higher than the expected 31.83 million tons in September, a 23% increase from the previous year, and 20% higher than the 10-year average. The wheat production in New South Wales and Western Australia increased by 75% and 40% respectively compared to the previous year. ABARES expects Australian wheat exports to reach 21.94 million tons in 2024/25, higher than last month's forecast of 20.9 million tons and a year-on-year increase of 11%. In Argentina, another major wheat exporting country in the southern hemisphere, according to the Buenos Aires Grain Exchange on Thursday, Argentina's wheat production may be higher than previously expected, with farmers reporting an increase in wheat yields as the harvest progresses. At present, half of the wheat harvest in the country has been completed, and the results show a relatively positive trend. The exchange currently predicts a wheat production of approximately 18.6 million tons. The Rosario Grain Exchange predicts that Argentina's wheat production for 2024/25 will be 18.8 million tons. The US Department of Agriculture currently expects Argentina's wheat production for 2024/25 to be 17.5 million tons, higher than last year's 15.85 million tons.
China's wheat harvest has returned to a high level, with relatively low dependence on foreign countries
According to the latest data from the National Bureau of Statistics, the total grain output in China in 2024 will be 706.5 million tons, an increase of 11.09 million tons (22.2 billion jin) or 1.6% compared to 2023. The production of rice, wheat, and corn has all increased. The national grain planting area is 119319 thousand hectares (1789.79 million mu), an increase of 351 thousand hectares (5.26 million mu) or 0.3% compared to 2023. Among them, the grain sowing area is 100458 thousand hectares (1506.87 million mu), an increase of 532 thousand hectares (7.97 million mu) from 2023, an increase of 0.5%. The total grain output in China is 706.5 million tons (1413 billion catties), an increase of 11.09 million tons (22.2 billion catties) or 1.6% compared to 2023. Among them, the grain production was 652.29 million tons (1304.6 billion catties), an increase of 10.86 million tons (21.7 billion catties) or 1.7% compared to 2023. In 2024, the national grain yield per mu will be 432.9 kilograms, an increase of 4.9 kilograms or 1.2% compared to the previous year. Last year's wheat harvest was severely affected by the "rotten field rain" weather, resulting in a decrease in yield per unit area. This year, it achieved a recovery growth, with a wheat yield of 396.0 kg/mu, an increase of 10.6 kg or 2.7% compared to the previous year. The wheat yield was 280.2 billion catties, an increase of 7.02 billion catties or 2.6% compared to the previous year.
According to the latest customs data, China's wheat imports in October were 210000 tons, a year-on-year decrease of about 66%. The annual wheat imports showed a clear downward trend, and China's dependence on foreign wheat gradually decreased. At present, the factors affecting wheat prices in China are still policy storage and the improvement of domestic demand. In the future, the focus will be on the strength and sustainability of storage policies, as well as the improvement of downstream demand during the "double festival" period.
International wheat prices still have the potential to rise
Overall, the key variable affecting the future global wheat market price trend is whether Russian wheat exports will significantly decrease as scheduled. In the past few years, the abundant and low-priced Russian wheat has been the main pricing factor in the global wheat market. However, with Russia significantly reducing its export quotas from February to June 2025, the global market has to rely more on other exporting countries for supply. Although the abundant supply of harvested southern hemisphere wheat continues to put pressure on wheat prices, over time, the market will increasingly focus on the weather after next year's winter season and the prospects for northern hemisphere wheat production. It is expected that international wheat prices will continue to rise. Domestically, grain holders are generally observing whether downstream stocking before New Year's Day and Spring Festival can boost wheat procurement demand, and the short-term market circulation of grain sources may slow down. There are many failed auctions of policy wheat, indicating that the current willingness of flour milling enterprises to build warehouses is still not high, and they continue to adopt the purchase and sales strategy of low inventory and fixed procurement based on sales. It is expected that there will be little improvement in flour sales next week, and wheat prices will continue to fluctuate slightly, with both ups and downs limited. Expected wheat prices in the main production areas are around 2430 yuan/ton, with a focus on changes in market buying and selling attitudes and policy auctions.