Tensions between Russia and the West negatively affect the prices of Black Sea wheat

Russia’s recognition of the terrorist associations of the LPR and DPR, which was an official confirmation of the occupation of the region that began in 2014, will lead to the introduction of sanctions against Russia. Markets reacted to the possible complication of wheat exports with an increase in quotations, but prices for Ukrainian and Russian wheat are falling amid the risks of further military escalation of the conflict.

• March Black Sea wheat futures on the Chicago Stock Exchange fell by 1 1.25/ton to 3 308.75/ton, losing 3% over the week due to possible export restrictions from Ukraine and Russia.

Export prices for Russian wheat have been falling for six consecutive weeks. During the week, wheat with protein 12.5% fell in price, according to Icarus, from 3 318 to F 312/ton FOB, and according to SovEcon – from 3 316 to F 313/ton FOB.

The cost of freight in the region has increased due to increased insurance premiums, but there is no decrease in deliveries yet.

Ukraine exported 800 thousand tons of wheat during February 1-21, and in general in the season – 17.85 million tons, which is 34% ahead of last year’s pace. During this time, Russia exported 16.8 million tons of wheat (according to SovEcon), which is 45% less than on this date last year.

In Ukraine, purchase prices for food wheat remain in ports at the level of 2 288-290/ton or UAH 9250-9400/ton, and in the near future will remain under pressure from falling demand for Black Sea wheat.

Wheat prices in Europe are supported by increased tensions between Ukraine and Russia.

• March European wheat futures on Paris ‘ Euronext rose 2.25 €/ton to 274 €/ton or.309.8 / ton, adding 2% of the price for the week.

Wheat in the United States rose in price by 2-2.4% following neighboring soybean and corn markets and on expectations of increased exports.

March futures rose:

• by 5 5.88 / ton to Чикаго 298.7/ton for soft winter SRW wheat in Chicago,
• by 7 7.35 / ton to H 314.2/ton for hard winter HRW wheat in Kansas City,
• by 4 4.41/ton to.357.1 / ton for hard spring HRS wheat in Minneapolis.