This significant drop is driven by concerns over potential transport disruptions in Canada and unexpectedly optimistic production forecasts from Ukraine.
The threat of a rail strike in Canada, involving over 9,000 workers from Canadian National Railway and Canadian Pacific Kansas City Ltd, has prompted farmers to preemptively sell their grain to avoid anticipated transport bottlenecks. This is particularly critical as more than 90% of Canada’s grain is transported by rail, with the country expected to deliver around 25.3 million tonnes in the 2024-2025 marketing year.
Adding to the market pressures, wheat production in Europe is under strain, especially in France, where output is projected to fall by 25%, leading to one of the worst harvests in decades
Despite these challenges, the U.S. Department of Agriculture (USDA) has revised its forecasts for Ukrainian wheat production upwards by 10.8%, now expecting 21.6 million tonnes. This unexpected boost in supply has further weighed on wheat prices, driving them to levels not seen in four years.
The juxtaposition of transport uncertainties in Canada and the promising outlook from Ukraine underscores the volatility of global wheat markets, where regional challenges can have far-reaching impacts on pricing and supply chains worldwide.
