Speculative rise in wheat prices continues for three weeks in a row

On world markets, speculative growth of wheat prices continues, as traders believe the weather is not favorable for crops, although in most exporting countries the weather conditions are quite good, and only in some areas there is a shortage of precipitation, which is offset by low temperatures.

The pace of sowing, which exceeds last year’s and precipitation forecasts should reduce the impact of speculative factors, but probably it will be done faster by the USDA experts, who at the end of the week will publish crop forecasts for 2024/25 MG.

Wheat quotations for the three weeks rose by 12.3-15.4%, in particular yesterday – by 1.5-4.4%, ignoring the data on the improvement of crops, high rates of sowing and reduced exports to the United States.

July futures for wheat of the new harvest yesterday increased:

by 4.2% to 238.4 $/t – for soft winter SRW wheat in Chicago (+6.6% for the week, +14% for three weeks),
3.8% to 248,1 $/t – for hard winter HRW wheat in Kansas City (+3.8%, +15.4%),
by 1.5% to 266.6 $/t – for hard spring HRS wheat in Minneapolis (+2.1%, +12.3%),
by 4.4% to 245.25 €/t or 264 $/t – September wheat futures on the Paris Euronext (+6.6%, +12.8%).

According to the NASS USDA, in the United States during April 28 – may 5, the number of winter wheat crops in good or excellent condition increased compared to last week by 1% to 50% (29% last year). Spring wheat has been planted on 47% of the planned areas (21% last year, 31% on average over 5 years).

wheat Exports from the United States for April 26 – may 2 decreased compared to the previous week by 36.1% to 321,1 thousand tons, and in General in the season reached 17.26 million tons, which is 6.54% lower than last year.

Due to dry weather in Rostov region and Krasnodar and Stavropol regions, ICAR experts lowered the forecast of wheat production in 2024/25 MY from 93 to 91 mln tonnes, and exports from 52 to 50.5 mln tonnes, which will be in line with the current season.

In April, Russia exported 4.65 mln tonnes of wheat (4.55 mln tonnes in April 2023), and in May it can ship another 4.2 mln tonnes, which will almost match the record level of May 2023 – 4.3 mln tonnes.

During the week, export prices for May deliveries of Russian wheat with protein 12.5% increased by 3.5 $/t to 215 $/t FOB, for French wheat – by 22 $/t to 240 $/t, German wheat – by 16 $/t to 247 $/t.

In 2023/24 MY (as of May 6), Ukraine exported 16 mln tonnes of wheat, up 9.6% compared to last year. By the end of the season, another 2 mln tonnes can be shipped.

Amid rising world prices, export demand and purchase prices for wheat continue to grow in Ukraine. During the week, prices for feed wheat increased by 100-200 UAH/t to 7300-7500 UAH/t or 163-166 USD/t, and for food wheat – by 100-200 UAH/t to 7950-8100 UAH/t or 178-185 USD/t with delivery to the Black Sea ports. the price of wheat of the new harvest are at the same level, so farmers are actively selling stocks amid favorable weather for crops.

In the coming days, the weather is expected to improve in the US, Europe, Ukraine and Russia, which will accelerate the sowing of spring wheat and will have a positive impact on crops. This will increase the pressure on the quotes of the new crop, which are now 5-20 $/t higher than the prices of the old crop.

Tags: Ukraine, Russia, prices, wheat, USA