Wheat prices in Ukraine reached the highest level since the war and stopped growing

Export purchase prices in the Black Sea ports of Ukraine reached the highest level since the pre-war period of 215-220 USD/t or 9700-10000 UAH/t for milling wheat and 200-203 USD/t or 9100-9300 UAH/t for feed wheat with delivery to the port, after which they stopped growing.

They are supported by high prices for European wheat and the results of the tender in Egypt, where GASC purchased Ukrainian wheat with protein 12.5% and delivery on July 5-15 at a price of 268.8 $/t FOB Black sea ports, which corresponds to 245-250 $/t CPT port.

Recent precipitation improves the condition of wheat crops, but the potential for a high yield is lost due to too dry weather in May. According to the Ukrainian Hydrometeorological Center, May 2024 was one of the driest months in Ukraine over the past 30 years, and in Cherkasy region over the past 100 years. Drought conditions were observed in most areas of Kharkiv, Kherson, Zaporizhzhia, southern and central Dnipropetrovs’k, and western Poltava regions.

As of June 4, 90% of the planned areas were planted with spring crops in Russia. In the regions where spring crops are grown, there was good precipitation, which increased the total area under winter and spring crops by 300 thousand hectares to 84.5 million hectares. In the South and North Caucasus, the heat will reach 30-35 ° C, which will accelerate the maturation of wheat, which will be harvested in a week.

The SovEcon agency has lowered its forecast for the wheat harvest in Russia from 82.1 to 80.7 million tons, although in March it estimated it at 94 million tons.

On Euronex, September wheat futures yesterday fell 1.7% to 254.25 €/t or $277/t (-3.5% for the week, +8.2% for the month) under pressure from slow exports and the results of the tender in Algeria.

According to the European Commission, in 2023/24 MY (as of June 2), the EU exported 28.2 mln tonnes of wheat (France – 8.2 mln tonnes, Romania – 6.2 mln tonnes) out of 35 mln tonnes forecasted by USDA, which is 5% down from last year. At the same time, wheat imports to the EU increased by 2% compared to the previous season to 8.7 mln tonnes (against USDA forecast of 13.5 mln tonnes), of which 6.3 mln tonnes were supplied by Ukraine. Spain imported 5.3 mln tons of wheat, and Italy – 1.2 mln tons.

The state-owned Algerian agency OAIC at a tender on June 4 purchased 840 thousand tons of soft wheat of arbitrary origin for delivery in August at an average price of 279 $/t C&F, while Egypt recently purchased wheat at 302.2 $/t C&F.

Tags: Ukraine, prices, wheat