World wheat prices remain at an annual low, but in Ukraine they are increasing thanks to the intensification of sea exports

Wheat futures on world exchanges remain flat at the lowest level for the last two years against the background of significant supply and weak demand from importers. In Ukraine, wheat prices rose slightly due to increased exports through Black Sea ports. A second consecutive crop year increased the supply of wheat on the world market, although the global balance may be adjusted according to harvest data in Australia and Argentina.

IGC experts increased the forecast of world wheat production by 2 million tons to 785 million tons (803.4 million tons in FY 2022/23), which will be the second largest historical indicator. For Ukraine, the estimate was increased from 25.9 to 27.4 million tons (official forecast – 22.4 million tons, USDA – 22.5 million tons), for the Russian Federation – from 87.4 to 89 million tons (official forecast – 93 million t, USDA – 85 million t).

The Indian government has lowered the wheat production data (collected 6 months ago) from 112.74 to 110.5 million tons (USDA estimates it at 113.5 million tons), so the stock estimate will be adjusted.

In Argentina, according to the BAGE exchange, due to the drought of recent months, the number of wheat crops in poor or very poor condition has already increased to 47%.

December futures remain quite stable for the second week, although they rose slightly yesterday:

• by 0.2% to $215.8/t – for soft winter SRW wheat in Chicago (+1.7% for the week),
• by 0.1% to $246.5/t – for hard winter HRW wheat in Kansas City (0.3%).
• by 1% to $271.1/t – for HRS durum wheat in Minneapolis (+1.2%).

At the same time, December wheat futures on the Paris Euronext (+0.1%) fell by 1.1% to €237.75/t or $254/t.

In the USA, as of October 22, 77% of the planned areas were sown with winter wheat (78% on average over 5 years), and good rainfall is contributing to the development of crops.

According to the MSG of the USA, during the week of October 13-19, wheat exports halved to 168.9 thousand tons, and in total in the season amounted to 6.92 million tons, which is 27% or 2.59 million tons lower than last year’s pace.

As of October 20, the Russian Federation exported 19.4 million tons of wheat (15 million tons last year), but in October, the pace of deliveries decreased against the background of falling demand prices.

In Ukraine, recent precipitation and higher than normal temperatures contribute to the acceleration of sowing and development of winter wheat crops. Wheat exports on October 23 amounted to 4.15 million tons (4.5 million tons last year), and the pace of deliveries is falling.

Against the backdrop of increased vessel traffic to Black Sea ports and increased export demand, food wheat prices rose to $145-150/t with delivery to Odesa ports and $150-155/t to Danube ports, while feed wheat prices remained at $115 and $130/t, respectively.

Purchase prices in the Danube ports were additionally supported by the authorities’ struggle with cash purchases and the registration of exports through shell companies, which reduced the volume of deliveries.