Wheat prices continue to fall amid USDA report and cancellation of tender in Egypt

Yesterday, wheat quotations on the world exchanges continued to fall under the pressure of the resumption of the grain corridor, the cancellation of the tender in Egypt and pending an updated balance sheet from the USDA.

In two days, 14 ships came to the Black Sea ports of Ukraine for loading, which testifies to the ability of the Russian Federation to quickly inspect ships without forming queues. News about the resumption of the grain corridor last week led to lower wheat prices.

On November 7, the Egyptian GASC held an international tender for the purchase of wheat, for which 18 offers were submitted. Romanian and French wheat were offered at $356.45-$383/t FOB, the cheapest offer for Russian wheat was $369.95/t, and the only Ukrainian wheat offer was the most expensive at $400/t C&F.

However, GASC, in view of the excessively high prices, canceled the tender yesterday, because in August and September it bought wheat at 368 and 340 $/t C&F, and now the prices for Russian wheat on an FOB basis are 310-320 $/t, and the volume of offers is increasing.

The Algerian agency OAIS is holding a tender for the purchase of 400,000 tons of wheat, at which, according to preliminary information from traders, it purchased Russian wheat at a price of $368/ton C&F.

According to the average forecasts of USDA analysts, in the new balance for wheat, the estimate of world reserves in 2022/23 may be reduced by 0.6 million tons to 266.9 million tons and slightly increase the forecast of world production.

On this news, wheat quotations on world exchanges fell by 1-2.2% yesterday, in particular:

• by 2.2% or $6.61/t to $304.1/t – December futures for soft winter SRW wheat in Chicago,
• by 1.2% or $4.22/t to $347.5/t - December HRW hard winter wheat futures in Kansas City,
• by 1% or $3.58/t to $350.9/t - December futures for HRS durum wheat in Minneapolis,
• by 0.2% or $0.75/t to $316.75/t - November Black Sea wheat futures in Chicago,
• by 1.8% or €6/t to €330/t or $332.6/t - December wheat futures on Paris Euronext.

In the USA, 92% of the planned areas have already been sown with winter wheat (2% higher than the 5-year average), and in Ukraine and the Russian Federation - 90-95%, which reduces concern about the fate of the future harvest.