Strong export demand keeps wheat prices in Ukraine high

In December and January, Ukraine’s wheat exports were lower than last year, indicating a decline in export demand due to higher prices. However, the competition between exporters and processors for quality wheat is intensifying as farmers restrain sales.

In MY 2024/25, Ukraine exported 10.26 mln tonnes of wheat, up 25% compared to 8.2 mln tonnes last year. At the same time, in two weeks of January, the country exported 344 thsd tonnes of wheat, down 63% compared to the same period in 2023.

Amid stronger demand and hryvnia devaluation, the export prices for milling wheat increased by 100-200 UAH/t to 10300-10500 UAH/t or 215-220 USD/t, and for feed wheat by 100-150 UAH/t to 9850-10000 UAH/t or 207-208 USD/t with delivery to the Black Sea ports.

Processors have raised prices for quality milling wheat with gluten above 23%, the amount of which is limited, to 10200-10500 UAH/t with delivery to the mill, and for wheat with lower gluten prices remained at 9600-10000 UAH/t.

Lack of precipitation in Ukraine in December and January, especially in the South-Eastern regions, worries market participants, so they do not expect a significant reduction in prices in the new season.

In the January balance sheet, USDA experts lowered their forecast for wheat exports from Ukraine by another 500 thousand tons and from Russia by 1 million tons amid declining global consumption and high prices for black sea wheat.

After the speculative growth caused by frost in the United States, wheat prices on world markets are falling, but forecasts of a new wave of cold weather in the Midwest and the Plains of the United States, where winter wheat is grown, may again push prices up, as a slight snow cover in the Western regions increases the risk of crop loss.

March wheat futures yesterday moved in different directions:

• increased by 0.2% to 200,7 $/t – for soft winter SRW wheat in Chicago (+0.7% for the week, -2.6% for the month),
• remained at 206 $/t – for hard winter HRW wheat in Kansas City (+0.7%, -0.1%),
• fell 0.7% to 216.6 $/t – for hard spring HRS wheat in Minneapolis (-0.9%, -1.9%),
• fell by 1.2% to 231.25 €/t or 238.2 $/t – wheat futures on the Paris Euronext (+0.2%, +0.8%).

Seasonal increase in wheat supply in February – March and reduce the risk of loss of winter crops will increase pressure on prices at the end of the season, especially amid increasing planting areas in the United States and the EU.

Tags: prices, wheat, Ukraine