Frosts in the Black Sea region have created a nervous background in the wheat market – brokers

The world wheat market is operating in a weather premium mode. Fears of frost in the Black Sea region have created a nervous background, Spike Brokers reports.

“The market is assuming the risk of overwintering in Ukraine and southern Russia, temporarily shifting the focus from the balance to production threats,” the brokers note.

At the same time, the global balance has not changed structurally: stocks remain significant, and competition between exporters is high.

On the Chicago Stock Exchange, wheat prices rose to key levels after surpassing the average for the past 200 days. The growth was due to fears about the weather. However, if real crop losses are not confirmed, no significant further price increases are expected.

“Technically, the market is in a zone of increased volatility: confirmation of damage can push prices higher, and the lack of facts can quickly remove the premium,” the experts add.

The physical market is moderately active: importers are acting cautiously, Russian and European supply is present, and large global surpluses are holding back growth. Weather risks support the market more psychologically, but do not change the balance sheet structure.

In Ukraine, prices also increased slightly in line with the global market. However, large grain stocks from the previous harvest and expected surpluses for the next season limit the growth potential.

The SPIKE Spot Commodity Index Ukraine for wheat increased slightly during the week due to weather risks, but the dynamics remain subdued and do not signal the formation of a sustainable upward trend.

Food wheat with a protein content of 11.5% is traded within $214–215/t, and feed wheat — $209–210/t.

Tags: Black Sea region, wheat, prices