The global wheat market reacted to the attack on the Chernomorsk grain terminals with rising prices, especially for wheat supplied mainly from Ukraine Soft wheat. It gained 8,2% and 8,5% on the Chicago and Paris stock exchanges, respectively.
After withdrawing from the grain business, the Russian Federation launched missile and drone attacks on July 19 and 20 in Odessa, Chernomorsk and Mykolaiv, damaging port infrastructure. In addition, the Russian Defense Ministry said it would consider all ships calling at Ukrainian ports as a means of transporting arms and ammunition and would take appropriate action.
Yesterday September futures rose:
- up 8,5% to $267,4/tonne for Chicago SRW common wheat (+10,3% yoy, +2,5% for the month),
- by 4,8% to USD 318,5/tonne for hard winter wheat HRW in Kansas City (+4,7%, +3,8%),
- up 2,2% to $339/tonne for HRS hard spring wheat in Minneapolis (+1,5%, +5,2%),
- up 1% to $239/tonne – for black sea wheat in Chicago (+1%, -1,4%),
- by 8,2% to EUR 253,75/tonne or USD 284,75/tonne for wheat on Euronext Paris (+9,5%, +5,3%).
According to forecasts, Ukraine will reduce its wheat exports in the 2023/24 marketing year compared to the current season from 16,8 to 8-10 million tons (USDA estimates it at 10,5 million tons), which is only 5% of total grain exports will make up in the 2022/23 season. Therefore, the surge in listings in Chicago and Paris is more of a speculative nature. In the new season Ukraine exports Grains only via the Danube ports, and by July 19 it had already shipped 451.000 tons of wheat, up from 222.000 tons at this point last year. Increasing the capacity of the Danube ports to 2-3 million tons of grain per month will export 10 million tons of wheat, 2 million tons Barley, almost 3 million tons Rapeseeds and 15-17 million tons Corn allow in the 2023/24 marketing year.
Source: Ukragroconsult (Ukraine)