Wheat quotes fell slightly on Friday, but overall rose 1.5-4.6% for the week

Last week, wheat quotes on the US exchanges actively recovered from the previous drop, supported by data on China’s new purchase of US wheat. However, the increase in FAO’s global production forecast turned prices downward.

According to the USDA, China purchased 220,000 tons of red soft winter wheat from the United States, the first major purchase of American wheat since November 2022, when 100,000 tons of wheat were purchased.

FAO experts increased the forecast of world wheat production in 2023 by 3.7 million tons to 785 million tons, in particular for Ukraine and the Russian Federation, which compensates for the decrease in the harvest in Canada, Argentina, and Kazakhstan. The estimate of the world’s final stocks of wheat in 2023/24 was increased by 4.1 to 319 million tons.

December futures fell in price on Friday:

• by 1.8% to $208.8/t – for soft winter SRW wheat in Chicago (+4.9% for the week),
• by 2.5% to $247.6/t – for hard winter HRW wheat in Kansas City (+1.5%).
• by 1.5% to $264.7/t – for hard spring HRS-wheat in Minneapolis (+1.6%),
• by 0.2% to €234.75/t or $247.86/t – for wheat on the Paris Euronext (-0.3%).

In the Russian Federation on October 5, 93.8 million tons of wheat were harvested from 27.9 million hectares or 93% of the area (106.8 million tons last year) with a yield of 3.36 t/ha (3.56 t/ha), which increases the amount export offers. But exports are restrained by the 14.4% increase in wheat export duty from October 11 to 5,224 rubles/t ($52/t), due to which purchase prices fell to 11-12 thousand rubles/t or $110-120/t on FCA – farming in the central part of the Russian Federation.

In Ukraine, purchase prices for fodder wheat on the terms of FCA – economy during the week decreased by $5-10/t to $90-100/t, but traders’ resumption of purchases in Black Sea ports and activation of vessel activities may lead to a decrease in freight and an increase in demand prices in ports, which are currently $125-135/t for feed wheat and $145-150/t for food wheat.

As of October 6, wheat exports from Ukraine amounted to 3.474 million tons (3.46 million tons last year), out of the 11 million tons forecast by the USDA for 2023/24 MR.

Ukrainian farmers are not in a hurry to sell wheat at low prices, because due to a long drought in the country, the conditions for sowing and obtaining seedlings of winter wheat were unsatisfactory, and the optimal sowing dates have already ended. As of October 3, only 1.9 million hectares were sown with winter wheat in Ukraine against the forecast of 4-1.2 million hectares.

Tags: prices, wheat