Wheat prices rose amid hot weather in the United States and Northern Europe

The heat in the United States and Northern Europe, which set in this week, is exacerbating moisture shortages in wheat crops, leading to another jump in stock quotes.

Ukraine still has problems with exports, and so far there are no prospects for unlocking ports. However, Biden’s statement on the need to lift the naval blockade of Ukraine’s ports to launch nearly 20 million tonnes of grain to lower world prices gives hope that UN-sponsored international organizations will be able to rescue 90 foreign ships and restore safe navigation in the Black Sea.

Wheat prices rose yesterday due to weather factors, but today’s USDA report may change the dynamics.

July futures on US stock markets rose yesterday:

• $ 7.44 / t to $ 409 / t for soft winter SRW wheat in Chicago,
• $ 9.37 / t to $ 441.1 / t for winter winter HRW wheat in Kansas City,
• $ 14.05 / t to $ 459.9 / t on September hard spring futures for HRS wheat in Minneapolis.
• $ 6.25 / t to $ 388.5 / t on August Black Sea wheat futures in Chicago.

Black Sea wheat rose by 9.1% over the month on the forecasts of a protracted war and a decline in wheat yields in Ukraine. According to Refinitiv Commodities Research, the wheat harvest in Ukraine in 2022 will fall to its lowest level since 2013 – 23.4 million tons compared to 33 million tons last year.

• September wheat futures on Paris’ Euronext rose 6.75 € / t to € 403.25 / t or $ 424.27 / t yesterday, adding 12.5% for the month amid droughts in the US and the EU, which could lead to a reduction in wheat production in major exporting countries.

Despite the blockade of supplies from Ukraine, wheat exports from the EU remain low. During the week, it halved to 238.5 thousand tons, and in the season reached 22.77 million tons, which is 3% lower than last year. By the end of the season, it will be able to export a maximum of 3 million tons of wheat, although the USDA projected exports at 34 million tons.

In the current season, the European Union has reduced wheat exports to Algeria from 5.17 to 3.46 million tons, to Nigeria – from 2.15 to 1.74 million tons, Morocco – from 2.22 to 1.45 million tons, while increasing exports to Egypt from 1.01 to 2.36 million tons and to China – from 1.76 to 2.13 million tons.

It is worth noting that India, not the EU, as analysts expected, continues to actively replace Ukraine in wheat supplies to the world market. In April, India exported a record 1.4 million tons of wheat, and in May will be able to supply another 1.5 million tons, then the total export of the season will reach 7 million tons.

India supplied wheat to Asia and the Middle East, Europe and North Africa, and in April opened exports to new markets – Turkey and Israel. According to market participants, wheat was sold at a price of 295-340 $ / t FOB, which is much lower than European sellers.