Rise of the US dollar has stopped the fall in purchase prices for wheat in Ukraine

After a week of falling export demand prices for wheat in Ukraine in hryvnia slightly increased due to the rapid growth of the dollar on the interbank market for two days by 1.3% from 37.66 to 38.15 UAH/$.

This week, the purchase price of feed wheat in the ports of the Black sea remained at 150-154 $/t, but hryvnia prices increased by 50-100 UAH/t to 6300-6400 UAH/t amid limited supply from producers.

At the same time, the number of offers of milling wheat with 12.5% protein is growing, which processors buy at 7000 UAH/t with delivery to the mill. Low demand for flour does not allow raising prices, while exporters are almost not interested in wheat with a protein of 12.5% and buy wheat grade 3 at 170 USD/t or 7250-7300 UAH/t and wheat grade 2 at 175 USD/t or 7400-7600 UAH/t with delivery to the Black Sea ports.

According to the State Customs Service, Ukraine exported 9.969 mln tonnes of wheat in 2023/24 MY (as of February 12), compared to 10.388 mln tonnes in the same period last year. To reach the USDA’s forecast of 15 mln tonnes, Ukraine needs to export 1-1.5 mln tonnes per month until the end of the season, which is feasible given the better prices for Ukrainian wheat than for Russian and European wheat.

The fall in global prices caused the greatest damage to the prices of Ukrainian milling wheat, which is hard to compete with better quality Russian and European grain. Export demand prices for it fell by 5-7 USD/t to 170-175 USD/t or 6950-7400 UAH/t with delivery to ports.

In anticipation of data on the condition of crops in the United States and Russia after the winter and forecasts of wheat planting areas in the United States, world prices remain low.

During the week in Texas, the number of winter wheat crops in good or excellent condition decreased by 4% to 42%, but the slow pace of exports put pressure on prices.

According to the USDA, in 2023/24 MY wheat exports amounted to 11.71 mln tonnes compared to 14.3 mln tonnes in the same period last year.

March wheat futures yesterday had the following dynamics:

• remained at 219.5 $/t – for soft winter SRW wheat in Chicago,
• fell 0.7% to 218.4 $/t – for hard winter HRW wheat in Kansas City,
• fell 1.6% to 246.8 $/t – for hard spring HRS wheat in Minneapolis,
• increased by 0.2% to 209 €/t or 221,5 $/t – for wheat on the Paris Euronext.

the price of European wheat supported the reduction in the forecast of sowing areas of soft wheat in France from 4.49 to 4.36 million hectares, which will be 7.7% lower than last year.

In 2023/24 MY, wheat exports from the EU decreased by 6% to 18.65 mln tonnes compared to the previous season, although the export forecast was increased to 36.5 mln tonnes (35 mln tonnes in 2022/23 MY).

The increase in exports from Russia increases the pressure on the market, and rumors about the increase in the grain export quota set for the period February 15-July 1 by another 4 million tons to 32 million tons indicate an active sale of stocks in anticipation of a new high wheat harvest.

Tags: prices, wheat, Ukraine