During the week, purchasing prices for wheat in Ukraine increased against the background of reduced offers from producers and brisk export demand, and for feed wheat increased by 100-200 UAH/t to 6800-7000 UAH/t or $156-158/t and for food wheat – by 50-100 UAH/t to 7600-7900 UAH/t or $173-178/t when delivered to the Black Sea ports.
The victory of Ukrainian wheat in the Egyptian tender increased demand for food wheat, of which there was little left at the end of the season.
Farmers are taking advantage of the favorable weather to actively promote sowing and have no time to sell the leftovers. And the rainfall improves crop conditions and prospects for future crops. According to the first forecast of the Ministry of Agricultural Policy, the wheat harvest in Ukraine in 2024 will decrease from 22,2 to 19,2 million tons compared to last year.
Ukraine exported 2023 million tons of wheat in MY 24/15, including 1,17 million tons in April (0,65 million tons for the period April 1-17, 2023), while the USDA maintained its export forecast of April 16 million tonnes increased to 17,5 million tonnes.
The global market is saturated with cheap Russian wheat offered at $210/t FOB, while European wheat is trading at $217-220/t FOB and US wheat at $220/t FOB.
Russia exported 2,37 million tonnes of wheat in the first half of April (versus April's forecast of 4,6 million tonnes), matching the pace of exports in March.
US wheat exports for the 2023/24 marketing year (as of April 11) were 15,9% behind the previous year's level at 9,2 million tonnes. To reach the USDA's forecast of 19,3 million tons by the end of the season, an additional 3,4 million tons, or 480.000 tons per week, would have to be shipped.
During the week, new crop July wheat futures fell due to favorable weather USA and Europe by 1 to 3,2%, but rose again yesterday:
Soft winter wheat SRW in Chicago up 0,1% to $203,2/t (-3,2% for the week),
up 1% to $211,4/t for hard winter HRW wheat in Kansas City (-2%),
up 0,6% to $236,3/t for hard spring HRS wheat in Minneapolis (-1%),
0,1% to €214,5/t or $228,2/t for September wheat futures on Euronext Paris (-1,2%).
In the USA 55% of winter wheat plantings are in good to excellent condition, the best since 2020, and spring wheat planting rates are higher than last year. In the next 1-2 weeks, rainfall and temperatures will be above normal, which will favor sowing and crop development.
The IGC experts forecast a decline in world wheat production to 2024 million t and ending stocks to 25 million t for the 798/259 marketing year, compared to 262 million t in the current season.
Source: Ukragroconsult (Ukraine)