World prices for wheat are falling, but they continue to rise in Ukraine

Purchase prices for wheat in Ukraine remain under pressure from a slower-than-expected recovery of exports from Black Sea ports due to the delay in the inspection of ships by representatives of the Russian Federation in the JCC.

However, amid supply shortages, especially of food wheat, traders began offering premiums for quick delivery of high-quality wheat to the port. However, the limited demand on the world market restrains the pace of Ukrainian wheat purchases.

The Grain Industry Association of Western Australia reported a record wheat harvest for the region and increased its production forecast from 12.6 to 13 million tonnes, which would be 1.1 million tonnes higher than last year’s figure. USDA experts estimated total wheat production in Australia at 36.6 million tons in December.

The export of wheat from the USA for December 9-15 increased by 39% compared to the previous week to 304,000 tons, and in total for the season (as of December 15) amounted to 11.44 million tons, which is 1.8% lower than last year’s pace.

In November, China imported 1.01 million tons of wheat, which is 35.4% higher than in November 2021, and overall in 2022 it increased wheat imports by 0.6% year-on-year to 8.88 million tons.

In its December report, AAFC lowered its forecast for wheat production in the country in 2022/23 MR by 0.9 million tons to 33.8 million tons, compared to November estimates, while in the previous season it amounted to 22.3 million tons. The forecast for domestic consumption was reduced by 100,000 tons to 8.9 million tons (9.6 million tons last year), exports by 200,000 tons to 23.7 million tons (15.1 million tons last year), ending stocks by 1 million tons to 5 million tons (3.7 million tons last year).

Against the background of increased offers of Australian and cheap Black Sea wheat, stock market quotations decreased yesterday:

• by 0.7% or $2.02/t to $274.8/t – March futures for soft winter SRW wheat in Chicago,
• by 0.9% or $2.76/t to $307.4/t – March HRW hard winter wheat futures in Kansas City,
• by 0.5% or $1.65/t to $332.5/t – March HRS durum wheat futures in Minneapolis,
• by 0.2% or $0.75/t to $309.75/t – January futures for Black Sea wheat in Chicago,
• by 0.1% or 0.25 €/t to 297.75 €/t or $315.7/t – March wheat futures on Paris Euronext.

Tags: Ukraine, prices, wheat