Favorable weather for winter wheat in the USA, Europe and the Black Sea region is putting pressure on quotations

Temperatures have returned to normal after a hard freeze in the U.S., and showers are expected across much of the Midwest and Great Plains to improve wheat crop conditions.

Wheat quotations on world exchanges remain at a low level under the pressure of the unsold crop of Russian wheat, which remains the cheapest on the market. According to the MSG of the Russian Federation, the country harvested 105.7 million tons of wheat in 2022, while the USDA estimated it at 91 million tons. Presumably, the Russian authorities include in their data grain exported from the occupied Crimea and 4 regions of Ukraine.

The Egyptian GASC purchased 80,000 tons of Russian food wheat for delivery on February 1-15, 2023 at a tender of December 27 at a price of $339/t C&F. Only 5 bids were submitted to the tender, while Ukrainian wheat was offered at $355/t C&F, and Romanian wheat at $365/t C&F.

In 2022/23, Argentina will reduce wheat exports to an 8-year low of 6 million tons, compared to 15.3 million tons in 2021/22. At the same time, the total export sales of wheat amount to 8.9 million tons, so traders will be forced to buy almost 3 million tons on other markets.

Yesterday, stock quotes in the USA rose slightly:

• by 1.4% or $4.04/t to $288.6/t – March futures for soft winter SRW wheat in Chicago,
• by 0.3% or $1.1/t to $324.2/t - March HRW hard winter wheat futures in Kansas City,
• by 0.1% to $343.2/t - March HRS hard wheat futures in Minneapolis.

At the same time, the following decreased:

• by $0.25/t to $309/t - January futures for Black Sea wheat in Chicago,
• by 0.75 €/t to 314.5 €/t or $334/t - March wheat futures on Paris Euronext.

In order to control prices, the Government of India plans to ship another 1.5-2 million tons of wheat from stocks to flour mills (Food Corporation of India). The average retail price of wheat was 32.25 rupees/kg or $0.39/kg ($390/t) on December 27, compared to 28.53 rupees/kg or 0 at this time last year, according to the Ministry of Consumer Affairs. .34 $/kg. From April to October, India exported 4.7 million tons of wheat worth $1.5 billion, despite the export ban.

In Ukraine, purchase prices with delivery to Black Sea ports remain at the level of 7,700-8,300 UAH/t for food wheat and 6,700-7,400 UAH/t for fodder wheat, while in the Danube ports, demand prices for food wheat reach 8,800-9,050 UAH/t. and for fodder - UAH 7,800-8,050/t SRT-port.