Rising Russian wheat exports via Baltic ports increase pressure on European market

The European wheat market remains under pressure amid rising Russian exports via the Baltic Sea and expectations of ample global grain supplies. According to Reuters, on October 23, December wheat futures on Euronext traded at €234.25/t, remaining near a three-week low of €232.50/t.

Increasing shipments of Russian wheat through Baltic ports are reinforcing expectations of sufficient supply on the global market. The start of harvesting in the Southern Hemisphere is adding further pressure, with grain production forecasts remaining optimistic.

In particular, the Rosario Stock Exchange raised its wheat production forecast for Argentina to 23.8 mln t, compared with its previous estimate of 21 mln t. The upward revision of 2.8 mln t strengthens expectations of ample wheat supplies on the international market.

Meanwhile, traders are closely monitoring developments surrounding the war between Russia and Ukraine. Reports of potential peace talks are raising expectations of reduced risks to Black Sea grain trade, although attacks on commercial vessels continue. According to British trading company Frontier Agriculture, progress in negotiations could put additional downward pressure on global wheat prices, as worldwide supplies remain abundant.

Amid expectations of de-escalation in the Black Sea and favorable crop forecasts in the Southern Hemisphere, investment funds holding substantial long positions in Euronext wheat futures have begun reducing their exposure. This is also limiting the recovery of European wheat prices.

Tags: EU, prices, wheat, Russia, export