Wheat prices in Ukraine fall under pressure from falling world prices

Yesterday, wheat quotations on world exchanges fell sharply amid declining demand due to the completion of the harvest, as well as an increase in the harvest forecast for Russia, which negatively affected export prices for Ukrainian wheat.

September wheat futures declined:

• by 2.6% to 191 $/t – for soft winter SRW wheat in Chicago (-1.9% since the beginning of the week),
• by 1.9% to 197 $/t – for hard winter HRW wheat in Kansas City (-0.7%),
• by 1.6% to 213,6 $/t – for hard spring HRS wheat in Minneapolis (-2%),
• by 2.4% to 199,25 €/t or 222 $/t – for wheat on the Paris Euronext (-3%).

Traders have not yet reacted to the lower forecast of wheat harvest in the EU and the potential of the corn crop in Ukraine and Russia due to drought, which will increase the demand for feed wheat, as well as unfavorable weather for sowing winter canola and wheat.

In the United States, as of August 18, winter wheat was harvested on 96% of the area (95% on average for 5 years), and spring wheat – on 31% (36%), as the harvest is delayed by rains.

SovEcon raised its forecast for the Russian wheat harvest by 0.4 to 83.3 mln tonnes (92.8 mln tonnes in 2023 and 86.7 mln tonnes on average over 5 years) due to almost record spring wheat yields in Siberia and the Urals. At the same time, the forecast of corn harvest in Russia was reduced by 1.5 to 11.9 million tons, and barley – by 1.1 to 18.2 million tons.

Ukraine continues to discuss the volume of wheat export quota for 2024/25 MY, which the Ministry of Agrarian Policy plans to set at 16.2 mln tonnes. At the same time, the quota for wheat with 11% milling protein is proposed to be set at 4.6 mln tonnes.

In 2024/25 MY, Ukraine exported 2.78 mln tonnes of wheat, including 1.23 mln tonnes in August, while last year these figures were 1.47 mln tonnes and 646 thsd tonnes, respectively.

amid increasing supply and lower world prices, export purchase prices in Ukraine this week fell by another 50-100 UAH/t to 9200-9400 UAH/t or 195-200 $/t for food and 8200-8400 UAH/t or 175-180 $/t for feed wheat.

the State Agency of Tunisia has purchased 75 thousand tons of soft milling wheat for delivery in September – October at a price of 244,66 $/t CFR, which corresponds to the purchase price in the previous tender.

Algeria this week will hold three international tenders for the purchase of wheat, which may support the quotes of European grain.

Translated with DeepL.com (free version)

Tags: Ukraine, prices, wheat