Falling global wheat futures increase pressure on prices in Ukraine

Global wheat prices continued to decline amid weak importer demand, a comfortable global balance and a lack of progress in US-China trade negotiations. Wheat futures on major exchanges lost 4.5–6.3% over the week and as much as 12.8% over the month.

December SRW wheat futures in Chicago fell 5.5% over the week to $253.1/t, HRW wheat in Kansas City dropped 6.3% to $274/t, and HRS wheat in Minneapolis declined 6.2% to $258.2/t. On Euronext in Paris, wheat futures fell 4.5% to €233.25/t, or around $265/t.

Despite lower prices, wheat exports from the key Black Sea suppliers remain below last year’s levels. Ukraine exported 801 thsd tons of wheat in the first 25 days of September, compared with 1.52 mln tons a year earlier, while exports since the start of the season reached 2.486 mln tons versus 4.17 mln tons. Russian exports as of September 25 were down almost 50% at around 6 mln tons.

On Ukraine’s domestic market, high logistics costs to ports in Poland and Romania are adding pressure. Feed wheat is offered at UAH 5.3–5.8 thsd/t EXW, while milling wheat is at UAH 6.4–7.0 thsd/t. At Danube ports, purchase prices remain at $170–177/t for milling wheat and $150–155/t for feed wheat.

Further declines in domestic prices are being limited by weak farmer selling, as producers focus more on oilseed sales and harvesting late crops. At the same time, importers in Asia, the Middle East and Africa are postponing some purchases in anticipation of higher Black Sea wheat supply in the second half of the season.

Tags: Ukraine, prices, wheat, futures, global market