Wheat prices in Ukraine continue to rise amid a shortage of supply

Against the backdrop of a lack of precipitation and forecasts of dry and frosty weather in Ukraine for the next 7-10 days, farmers continue to hold back wheat sales while awaiting information on the condition of winter crops and the prospects for the future harvest.

Following the increase in prices for Russian and European wheat, export prices for wheat in the Black Sea ports of Ukraine increased by $1-3/t in a week, in particular:

• for food wheat – by $2-4/t to $222-225/t or 10,600-10,800 UAH/t,
• for feed wheat – by $1-3/t to $215-217/t or 10,200-10,300 UAH/t.

The strengthening of the hryvnia against the dollar by 1% per week restrains the growth of prices in the national currency, but this trend may be temporary, and the exchange rate will return to the level of 42-42.3 UAH/$.

The export rate of Ukrainian wheat in recent months has remained lower than last year. In January, exports amounted to 831 thousand tons (69% less than in January 2024), and in total in the season reached 10.74 million tons, which is 19% higher than the corresponding figure last year. By the end of the season, Ukraine can export about 5.3 million tons of wheat, with the main demand expected in February-March. And then an increase in supply on the world market may lead to a drop in prices.

Against the backdrop of frosts and forecasts of dry weather in the regions of winter wheat cultivation in the USA, wheat quotes on American exchanges increased by 5-6% per week, and by 4-5.7% per month. Meanwhile, wheat exports from the US for the period January 24-30 decreased by 48% compared to the previous week to 251.6 thousand tons, and in total for the season reached 14.03 million tons, which is 21% higher than last year’s pace.

March wheat futures rose yesterday:

• by 1.3% to $208.24/t for soft winter SRW wheat in Chicago (+5% for the week and +5% for the month),
• by 1.4% to $215.2/t for hard winter HRW wheat in Kansas City (+6%, +5.7%),
• by 2% to $226.5/t for hard spring HRS wheat in Minneapolis (+5%, +4%),
• by 1% to €234.5/t or $239/t for wheat on the Paris Euronext (+4%, +0.6%).

Export prices for Russian wheat with 12.5% ​​protein rose by $1-4 to $237-242/t FOB for the week, but the pace of exports from the Russian Federation is falling. In January, about 2.54 million tons were exported (including to the EAEU countries), while in January 2024, exports amounted to 4.08 million tons.

The decrease in the export potential of Ukraine, Eastern Europe and Russia supports world prices. Last week, the SovEcon agency reduced the forecast for wheat exports from Russia in the MY 2024/25 from 43.7 to 42.8 million tons due to low sales and shipments.

In the 2024/25 MY (as of January 26), EU countries reduced their exports of soft wheat by 37% compared to the previous season to 12.18 million tons, which is only 41% of the export forecast for the entire season. Therefore, by the end of the season, the EU can export another 17 million tons of wheat.

The quote was additionally supported by President Trump’s decision to postpone the introduction of import tariffs on Mexico and Canada after negotiations with the leaders of these countries.

Tags: Ukraine, prices, wheat