Purchase prices for wheat in Ukraine are falling amid declining world prices and the strengthening of the hryvnia

During the week, export demand prices for wheat in Ukraine declined amid falling prices on US exchanges and the strengthening of the hryvnia on the interbank market by 1% to 41 UAH/$. Prices are also under pressure from declining demand from importing countries, which this year harvested good crops of their own, as well as an increase in the global market supply of cheap wheat from Russia.

For the week on CPT ports of the Black sea, the price of milling wheat fell by 1-5 $/t to 195-205 $/t or 9300-9600 UAH/t, and for feed wheat – by 1-3 $/t to 175-180 $/t or 8200-8400 UAH/t.

Active export of wheat keeps prices high. As of July 31, Ukraine exported 1.438 mln tonnes of wheat (758 thsd tonnes in the same period last year) out of the USDA’s forecast of 13 mln tonnes for the current season.

As of July 26, Ukraine harvested 14.7 mln tonnes of wheat from 3.5 mln hectares or 78% of the area, yielding 4.2 t/ha. In the western regions, the yields are better, which will allow to harvest 19.5-19.8 mln tonnes of wheat, as forecasted by the UGA and USDA.

According to Rusagrotrans, export prices for Russian wheat with protein 12.5% and delivery in August for the week increased (for the first time in 2 months) by $5/t to 222 $/t FOB amid increased exports. The forecast of wheat exports in July increased from 2.5 to 3.3 million tons, which is still inferior to 4.5 million tons shipped in July 2023.

Forecasts of a good wheat harvest in the United States put pressure on the quotes, and the September futures for soft winter SRW wheat in Chicago are trading at 193,7 $/t, which is the lowest since the end of 2020.

Heavy rains in France and Germany, and now in the Baltic countries, delayed the harvest and worsen the quality of the grain. Despite this, wheat prices on the Paris Euronext fell by 1% to 220.25 €/t or 238.5 $/t for the week, which increases pressure on prices for black sea wheat.

According to the European Commission, wheat exports from the EU in the period July 21-28 decreased compared to the previous week by 51% to 301 thousand tons, and in total in the season reached 1.85 million tons, which is 38% lower than last year.

The latest procurement tenders indicate the availability of cheap wheat on the world market. Thus, Jordan purchased 50 thsd tonnes of durum milling wheat for shipment in October at the price of 256 $/t C&F, and Tunisia purchased 125 thsd tonnes of soft milling wheat at the price of 244-246 $/t C&F and 50 thsd tonnes of durum wheat at the price of 323-326 $/t C&F for delivery in August-October.

Tags: Ukraine, Russia, EU, prices, France, wheat, USA, Germany