Wheat prices in Ukraine are rising amid declining supply

During the week, the purchase price of wheat in Ukraine increased amid declining supply from producers and strong export demand, and increased for feed wheat by 100-200 UAH/t to 6800-7000 UAH/t or 156-158 USD/t and for food wheat by 50-100 UAH/t to 7600-7900 UAH/t or 173-178 USD/t with delivery to the Black Sea ports.
the Victory of Ukrainian wheat in the tender in Egypt has increased the demand for milling wheat, which at the end of the season was a little.

Farmers are actively sowing due to the favorable weather and have no time to sell the leftovers. And precipitation is improving the condition of crops and the prospects for the next harvest. According to the first forecast of the Ministry of Agrarian Policy, in 2024 the wheat harvest in Ukraine will decrease from 22.2 to 19.2 mln tons compared to the previous year.

In 2023/24 MY, Ukraine exported 15 mln tonnes of wheat, including 1.17 mln tonnes in April (0.65 mln tonnes in April 1-17, 2023), and USDA raised the export forecast from 16 to 17.5 mln tonnes.

The world market is oversaturated with cheap Russian wheat, which is offered at 210 $/t FOB, while prices for European wheat are 217-220 $/t FOB, and for American wheat – 220 $/t FOB.

In the first half of April, Russia exported 2.37 mln tonnes of wheat (against the forecast of 4.6 mln tonnes in April), which is in line with the exports in March.

The U.S. wheat exports in 2023/24 MY (as of April 11) totaled 15.9 mln tonnes, down 9.2% from last year’s pace. To reach the USDA forecasted 19.3 mln tonnes by the end of the season, the country needs to ship another 3.4 mln tonnes or 480 thsd tonnes weekly.

During the week, the July futures for wheat of the new harvest fell by 1-3.2% amid favorable weather in the United States and Europe, but yesterday they rose:

• by 0.1% to 203,2 $/t – for soft winter SRW wheat in Chicago (-3.2% for the week),
• 1% to 211,4 $/t – for hard winter HRW wheat in Kansas City (-2%),
• 0.6% to 236,3 $/t – for hard spring HRS wheat in Minneapolis (-1%),
• by 0.1% to 214.5 €/t or 228.2 $/t – September wheat futures on the Paris Euronext (-1.2%).

In the United States in good or excellent condition are 55% of winter wheat crops, which is the best indicator since 2020, and the rate of sowing of spring wheat exceeds last year. In the next 1-2 weeks, precipitation and temperatures will be above normal, which will facilitate sowing and development of crops.

IGC experts forecast that in 2024/25 MY the world wheat production will decrease to 798 mln tonnes, and the ending stocks – to 259 mln tonnes, while in the current season they will amount to 262 mln tonnes.

Tags: Ukraine, export, prices, wheat, USA