Wheat prices rose by 5-6% after India’s export ban

Indian authorities on Saturday announced a ban on wheat exports, although they said they would continue to supply wheat to some countries, such as Egypt or Bangladesh.

Against the background of this decision, world wheat prices rose by 5-6%, namely:

• 6% or $ 25.7 / t to $ 458.4 / t – July futures for soft winter SRW wheat in Chicago,
• by $ 5.5 or $ 25.7 / t to $ 496.8 / t – July futures for winter winter HRW wheat in Kansas City,
• 4.5% or $ 22.05 / t to $ 508.9 / t – September HRS wheat durum futures in Minneapolis,
• 4.2% or $ 16.75 / t to $ 410.75 / t – August Black Sea wheat futures in Chicago,
• by 5.4% or € 21.75 / t to € 438.25 / t or $ 457.3 / t – September wheat futures on Paris’ Euronext.

The main factor influencing the world wheat market remains the war in Ukraine and the uncertainty with the unblocking of ports before the start of the new harvest. This raises concerns among traders about a possible shortage of wheat in the new season, especially given the deteriorating state of winter wheat crops in the United States and France.

According to NASS Crop Progress, in the week of May 9-15, the number of winter wheat crops in the United States in good or excellent condition decreased by 2% to 27% (48% last year), which is the worst figure since 1990. The sowing of spring wheat is very slow, with only 39% sown compared to 83% last year and 67% on average over 5 years.

Wheat exports for the week of May 6-12 increased by 32.4% to 348 thousand tons. In total, 19.376 million tons of wheat were exported during the season, which is 20.62% lower than last year.

In France, according to FranceAgrimer, the number of winter wheat crops in good or excellent condition decreased from 89% to 82%.

In Ukraine, the sown area of winter wheat decreased by 4.5% compared to 2021 to 6.5 million hectares, and spring – by 2.5% to 187.5 thousand hectares. However, part of the crops in the occupied territories may be lost, so the future harvest is estimated at 19-21.5 million tons compared to last year’s 33 million tons. Low temperatures and sufficient rainfall contribute to crop development.

Wheat prices in Ukraine remain at a low level of 7000-7500 UAH / t (240-260 $ / t) with delivery to the mill, as exports are limited by the state and require licensing, and there are logistical difficulties with transportation to EU transit stations and ports Romania.

As shipments to the west intensify and exports increase, domestic wheat prices will rise to $ 300 / t.

Tags: Ukraine, Egypt, EU, prices, France, wheat, India, USA, Bangladesh