Wheat prices in Ukraine continue to grow, although the fall in world prices is accelerating

Yesterday, wheat prices on world exchanges fell by 1.7-1.9%, losing 2.5-3.8% over the week, under pressure from improved crop forecasts in Argentina and Australia, as well as weather in the United States. In Ukraine, prices continue to rise amid a shortage of supply, but they may soon decline following the fall in EU prices, which lost 3.3% over the week.

According to the forecast of Rosario Grain Exchange, Argentina will harvest 19.5 mln tonnes of wheat in MY 2024/25, while the USDA representative in the country estimates the crop at 18 mln tonnes, as well as USDA in the October report. The exchange’s experts expect the wheat exports to reach 13.3 mln tonnes, the second highest after the record 15.4 mln tonnes in 2021/22 season.

According to NASS USDA’s Crop Progress, as of October 27, 80% of the U.S. winter wheat area was planted (84% on average for 5 years), and 38% of the crops are in good or excellent condition (47% last year). Precipitation forecast for the coming days may improve the condition of crops. Exports of wheat from the United States in MY 2024/25 reached 9.5 million tons, which is 33.5% higher than last year.

Yesterday, the December futures declined:

• by 1.9% to 205.3 $/t – for soft winter SRW wheat in Chicago (-2.5% for the week, -4.6% for the month),
• by 1.9% to 206.3 $/t – for hard winter HRW wheat in Kansas City (-3.8%, -3.8%),
• by 1.7% to 218.7 $/t – for hard spring HRS wheat in Minneapolis (-3.1%, -4.5%).

At the same time, December wheat futures on the Paris Euronext increased by 0.1% to 217 €/t or 234.5 $/t (-3.3%, -1.8%).

In Ukraine last week, the purchase price increased for food wheat by 1-2 $/t to 210-214 $/t or 9800-10100 UAH/t and for feed wheat – to 203-205 $/t or 9500-9600 UAH/t with delivery to the ports of the black sea amid a shortage of supply and the appreciation of the dollar.

Winter wheat in Ukraine planted 3.8 million hectares, but the lack of rainfall delays sowing, especially in the Eastern regions.

Decline in prices for European wheat by 5-10 $/t due to the depreciation of the Euro against the dollar limits the growth of wheat prices in Ukraine.

Egypt’s GASC cannot receive Russian wheat (which was purchased in September outside the tender at 235 $/t FOB), which was supposed to be shipped in October, as the necessary documents are still not ready, and the vessels needed for transportation have not been assigned.

“Russian traders were approached by an intermediary company that said it was buying grain on behalf of GASC, but this contradicts Egyptian public procurement practices, so traders refused to supply grain,” E. Zernin, the head of the Union of Russian Exporters, told Bloomberg.

It is possible that now GASC will announce a new tender for wheat purchases.

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Tags: Ukraine, prices, wheat