Wheat prices increased by 1.6-3.7% amid excessive rainfall and frost in Europe

World wheat prices yesterday rose by 1.6-3.7% amid a wave of cold and rain in Europe, especially in the Northern regions, which can delay sowing and damage spring crops.

Large funds for the week increased the number of long positions in wheat on the stock exchange in Chicago by 9835 to 96403 contracts, and in Kansas city – by 4620 to 49231 contracts, which is almost a record.

The markets have not yet reacted to the intention of the Russian Federation to increase the quota for grain exports by June 30 by another 5 million tons to 29 million tons.

According to the NASS USDA, the number of winter wheat crops in the United States in good or excellent condition for the week decreased by 5% to 50%, which is significantly higher than last year’s 26%. Spring wheat in the United States planted 15% of the planned area (10% on average for 5 years).

Yesterday, the July futures for new crop wheat recovered last week’s decline and rose:

• by 3.7% to 215.9 $/t – for soft winter SRW wheat in Chicago (+3.7% for the week),
• by 3.3% to 221.4 $/t – for hard winter HRW wheat in Kansas City (+3.6%),
• by 1.6% to 243,5 $/t – for hard spring HRS wheat in Minneapolis (+3%),
• by 3.7% to 223 €/t or 237.5 $/t – September wheat futures on the Paris Euronext (+3.1%).

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 2023/24 MY, the U.S. exported (as of April 18) 16.44 mln tonnes of wheat, down 8.1% from last year’s pace.

According to the forecast of Rusagrotrans, Russia will export 4.6 mln tonnes of wheat in April, which will slightly exceed the 4.55 mln tonnes shipped in April 2023.

Ukraine exported 15.13 mln tonnes of wheat in 2023/24 MY, including 1.29 mln tonnes in April 1-22, while last year the figures were 13.9 mln tonnes and 0.94 mln tonnes, respectively.

Export statistics show that Russia currently has the greatest influence on global prices, and significant carryover stocks in the country will continue to put pressure on the prices of the new harvest.

amid the appreciation of the dollar and stronger export demand, the purchase price in Ukraine during the week increased for feed wheat by 100-200 UAH/t to 6900-7100 UAH/t or 157-160 $/t, and for food – by 50-100 UAH/t to 7700-7950 UAH/t or 175-178 $/t with delivery to the ports of the black sea.

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