Wheat prices in Ukraine reached the highest level since the beginning of the full-scale invasion

Source:  GrainTrade

After a speculative rise in price during the month by 15-20%, wheat quotations last week fell by 4-5.5%, but yesterday speculative funds again began to actively buy futures, which led to prices rising by 3.9-5.7%. Traders are monitoring weather conditions, especially in Russia, where frosts in April damaged crops weakened by drought, and there will be no precipitation in the next 10 days, and are ignoring positive news about the wheat harvest in France and the United States.

July futures for wheat of the new harvest yesterday rose:

  • by 5.7% to 253,1 $/t – for soft winter SRW wheat in Chicago (+0.2% for the week),
  • by 5.3% to 256 $/t – for hard winter HRW wheat in Kansas City (-0.5%),
  • by 3.9% to 271,6 $/t – for hard spring HRS wheat in Minneapolis (+0.1%),
  • by 3.9% to 256.5 €/t or 278.5 $/t – September wheat futures on the Paris Euronext (-0.9%).

In Ukraine during the week significant precipitation is not expected, but the recent frosts almost did not damage the crops. Export demand prices for the week increased for milling wheat by 400-500 UAH/t to 8800-9100 UAH/t (which corresponds to the pre-war price level) or 195-202 $/t, and for feed wheat – by 500-600 UAH/t to 8200-8300 UAH/t or 180-184 $/t with delivery to the Black Sea ports.

Wheat exports in 2023/24 MG reached 16.64 million tons (8.9% more than last year), and for 1-20 may was shipped 866 thousand tons (880 thousand tons for the same period last year), which supports prices.

In Russia, agrarian news reports talk about “the deterioration of crops after the spring drought and frosts, which may result in a 10-30% decrease in yields.” The Union of Exporters of the Russian Federation estimates the wheat harvest in 2024 at 86.8 million tons, and exports at 46.9 million tons, while SovEcon recently estimated the harvest at 85.7 million tons.

According to the NASS USDA, in the U.S. as of May 19, spring wheat planted 79% of the planned areas (57% last year and 65% on average for 5 years). During may 12-19, the number of winter wheat crops in good or excellent condition decreased compared to the previous week by 1% to 49% (31% last year). Weather in the United States with low temperatures and heavy rainfall contributes to the development of crops.

Wheat exports from the U.S. for 10-16 may decreased by 46.4% to 205,6 thousand tons, and in General in the season reached 17.87 million tons, which is 6.8% lower than last year.

FranceAgriMe experts raised the forecast of ending stocks of soft wheat in France in 2023/24 MY from 3.75 to 3.9 mln tonnes, up 53.6% compared to 2022/23 MY. At the same time, the forecast of wheat exports to the EU countries was lowered from 6.28 mln tonnes to 6.25 mln tonnes, and outside the EU was increased from 10 mln tonnes to 10.05 mln tonnes. It is expected that the use of wheat for feed will decrease from 4.65 to 4.58 mln tonnes due to lower demand.

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