Unless additional logistics risks arise, global prices are unlikely to exceed last year’s level in the fall

UkrAgroConsult does not rule out that unless there are additional risks from logistics, the global price level in the fall is unlikely to exceed last year’s level.

Traditionally, the harvesting period means lower domestic prices in Ukraine, but this season may become an exception.

UkrAgroConsult highlights the factors that have caused the seasonal decline over the past many years:

• The need to pay for commodity loans (pre-delivered inputs, for example) and other forwards;
• the perpetual shortage of elevator capacity against the backdrop of an almost constant crop build-up.

“The peculiarities of this year reduce the impact of both of these factors – forwards almost did not work, and the load on elevators will be reduced, because let’s remember that this year’s grain harvest will be the lowest in the last 10 years. In addition, during the year there was an active construction of new elevators, especially in the west of the country, where the main export flows are now directed”, – add in “UkrAgroConsult”.

However, analysts emphasize that the beginning of the new season hints that it will be a little easier for farmers than in the past. Among the positives, they note that starting yields of early crops are slightly higher, as are starting prices, although risks remain for late crops, especially due to the heat during the corn pollination period. One of the key features of the season, the agency believes, could also be an increase in processing of both grains and oilseeds compared to the previous season.

As for rapeseed, according to the agency’s analysts, global prices in 2023/24 MY should be lower than last season. The global supply and demand balance looks better this year, and the EU is expected to have a good harvest. Market attention is focused on the drought in Canada, which is the main exporter of rapeseed on the world market, as well as on the continuation of the grain corridor in Ukraine.

Tags: Ukraine, grain, prices, wheat, rapeseed