Wheat prices have surged by as much as 24 percent on a monthly basis, while on an annual basis, they have risen by 15 percent due to concerns in financial markets regarding wheat supply. According to a report from the U.S. Department of Agriculture (USDA), it is expected that by the end of the 2024/2025 season, ending stocks of wheat will increase by 78 million bushels to a total of 766 million bushels, which is an 11 percent increase year-on-year. However, the problem is that the market expected around 780 million bushels, which has driven prices up, as stated in the latest HUP Weekly Focus.
It is expected that wheat production in the U.S. will increase by 46 million bushels to 1.858 billion bushels in the 2024/25 season, with the reason for this increase being larger areas for wheat cultivation as well as better yields. Similarly, U.S. wheat exports are expected to rise. When looking at global production, it is expected that supply will be lower, and that ending stocks in the 2024/2025 season will be at 253.6 million bushels, a decrease of nearly four million bushels compared to last year, marking the lowest levels since the 2015/2016 season.
Therefore, a further strong increase in wheat prices above 270 euros per ton is expected. The price of aluminum has recently been significantly rising. On a monthly basis, the price of aluminum has increased by three percent, while on an annual basis, it has jumped by as much as 22 percent. The largest contribution to the rise in aluminum prices is attributed to the renewed growth in China, which is also the world’s largest producer of aluminum (producing 41 million metric tons in 2023). Industrial production data for April was a surprise (+6.7 percent year-on-year, compared to the expected 5.5 percent), and it grew more than expected, indicating strong demand for various types of metals, including aluminum.
