Wheat prices rose sharply by 3.9-6% after falling to a 2-year low

After falling on Tuesday to a 2-year low yesterday, wheat quotations on the US exchanges rose by 3.6-7% on the data of the crop tour in Oklahoma and the information about the possible reduction of exports from the Black Sea region after the end of the grain agreement.

The wheat crop tour, currently underway in Oklahoma and scheduled for May 15-18 in Kansas, will provide new information on the condition of the crop, although good rainfall is expected there in the coming days.

The Egyptian GASC purchased 655,000 tons of wheat at the May 2 tender, including 300,000 tons of Russian wheat at a price of $276.95/t C&F ($-16.05/t compared to the April 6 auction) and 120,000 tons of Romanian wheat at a price $275.5/t C&F (-9.5 $/t compared to the cheapest Romanian offer at the auction on April 6) with delivery on June 10-30, as well as 235 thousand t of Russian wheat at a price of $270/t C&F (-23 $/t) with delivery on July 1-20.

Negotiations on the continuation of the grain corridor continue, but the Russian Federation says that it does not work for Russian exports, so the agreement should not be continued. At the same time, in April, the Russian Federation exported 5.03 million tons of wheat, which was the highest April figure in the last 6 years and doubled the 3.1 million tons exported in April 2022.

Currently, in the Bosphorus, due to the delay of inspections by Russian inspectors, more than 50 ships are waiting in line for loading in the ports of Ukraine, which is equivalent to 2.5 million tons of domestic agricultural products that were not exported in April.

In the Russian Federation, 25% of the planned areas were sown with spring crops, in particular, 24% of the areas were planted with spring wheat, which is three times ahead of last year's pace. For comparison, in the USA on April 30, 12% of the area was sown with spring wheat (18% last year and 22% on average for 5 years).

Yesterday, July wheat futures rose:

• by 5% to $235.1/t - for soft winter SRW wheat in Chicago,
• by 6% to $288.4/t - for hard winter HRW wheat in Kansas City,
• by 3.9% to $295.2/t - for hard spring HRS-wheat in Minneapolis,
• by 0.9% to $268.75/t - for Black Sea wheat in Chicago,
• by 2.1% to €235/t or $259.4/t - for wheat on the Paris Euronext.

European wheat prices are supported by restrictions on grain supplies from Ukraine to neighboring EU countries. The export of soft wheat from the EU increased compared to last season from 23.46 to 25.67 million tons, however, in the 2 months remaining until the end of the season, it is unlikely to reach the projected USDA 35 million tons. Algeria, Morocco remain the main buyers , Nigeria, Egypt and Saudi Arabia.