Purchase prices for food wheat in ports of Ukraine are increasing against the background of increased export demand and lack of producer offers.
In order to acquire the required quantities before the grain corridor is completed, traders increased the price of class 2,3 food wheat by $5/ton to $215-255/ton, while the price of feed wheat was $195-205/ton remained while a substantial supply existed.
In 2022/23 Ukraine has 16.01.23 million tons on 8,9/XNUMX/XNUMX Wheat exported (16,3 million tons last year), including for January 1-16 480 thousand tons (443 thousand tons last year), which is 69% of the forecast USDA–13 (15,3) million tons. 4,1 million tons remain free for export.
The wheat harvest is expected to fall to 2023-21 million tons in 12 compared to the current season, from 14, as the sown area is reduced by 71% to 3,8 million hectares due to unfavorable autumn weather and hostilities in the east and south of the country. Against the background of a crop shortening in 2023/24, Ukraine may limit exports, especially in the event of a prolonged war, which will support wheat prices already in the current season.
Prices for European Wheat also fall against the background of significant reserves and increased competition from the Russian Federation. According to the EU Commission, as of January 15, 2022/23, EU countries have exported 17,67 million tons of wheat, up 6% from the previous year's 16,63 million tons on that date. The main exporter of soft wheat is France with 7,5 million tons shipped, Romania and Germany with 2,01 million tons each, Latvia with 1,62 million tons and Lithuania with 1,44 million tons.
In January, the USDA experts increased their forecast for wheat exports from the EU by 0,5 to 36,5 (31,9) million tons. That means 18,83 million tons need to be shipped in the second half of the season, which will be difficult to do given the declining activity of importers during this period.
The rise of the euro to €1,077 per $ reduced the competitiveness of the European grain, leaving the March wheat futures for January in January up 4,2% to €296,75/tonne or $306,8/tonne (-7% per month) and the September wheat futures the new Crop fell by 2% to €7,2/tonne or $271,75/tonne (-293% per month) on the backdrop of a warm winter and good winter conditions.
Algeria's purchase of 500 thousand tons of wheat, mainly of Black Sea origin, increases price pressure from Algeria.
In the USA Stock market prices supported a 52% increase in exports per week to 320,4 thousand tons and the news of Putin's statement that storing additional wheat stocks domestically could be cheaper than exporting as traders see it as a sign of preparation for a protracted war with Ukraine accepted.
Source: UkrAgroConsult (Ukraine)