The fire at the port of Novorossiysk led to a speculative increase in wheat quotations

On Friday morning, a fire broke out in one of the warehouses of the port of Novorossiysk, where fuel pellets were stored. There was no indication that the Ukrainian drone attack was the cause, but wheat prices reacted to the news with a speculative rise, especially amid forecasts of heatwaves in the US next week.

Over the past week, wheat prices fell, losing 3.5-6%, but on Friday, traders began to take profits, due to which quotes rose by 1.8-4%.

In the Midwest and the US Plains, dry weather is expected for 3-5 days with temperatures of 35-37 ^o C, which causes speculative growth in soybean and corn prices, which, in turn, supports wheat prices.

On Friday, September futures fell:

• by 4% to $225.3/t – for soft winter SRW wheat in Chicago (-2.2% for the week),
• by 2.8% to $276.9/t – for hard winter HRW wheat in Kansas City (-0.3%).
• by 1.8% to $294.6/t – for hard spring HRS-wheat in Minneapolis (-1.6%),
• up to $245.5/t – for Black Sea wheat in Chicago (0%).
• by 2.2% to €233/t or $253.6/t – for wheat on the Paris Euronext (-1.5%).

In 2023/24, Russia remains the main global supplier of wheat, having shipped 6.8 million tons on August 16 (3.85 million tons on this date last year), thanks to the withdrawal from the grain agreement and the blocking of exports from the Black Sea ports of Ukraine.

From July 1 to August 18, Ukraine exported 1.4 million tons of wheat (783,000 tons last year), including 582,000 tons in August (407,000 tons last year), primarily through the Danube ports. In July, Ukraine exported 2.2 million tons of grain crops, which confirms the ability of the Danube ports to ensure the export of most of this year’s harvest.

Rumors are spreading on the market about India’s intentions to purchase 8-9 million tons of wheat from the Russian Federation in order to increase its reserves and curb the rise in domestic prices. The purchase of such a volume will lead to an increase in world prices, as the supply from the main exporting countries will decrease sharply, especially against the background of a decrease in the wheat harvest in these countries in the current season.

Tags: Russia, prices, wheat, USA, Ukraine