Wheat prices in Chicago exceed $ 400 / t due to deteriorating winter crops

Russia's war against Ukraine remains a major factor in influencing world wheat prices, as markets do not expect Ukraine's exports to resume quickly and restrictions on trade with Russia to be lifted.

In the US, wheat prices rose by 1.75-2.76% yesterday amid unfavorable weather for crops. According to NASS USDA, as of April 17, spring wheat in the country sown 8% of the area compared to 18% last year and 9% on average over 5 years. The number of winter wheat crops in good or excellent condition for the week decreased by 2% to 30%, although last year it was 53%. In western Arkansas, Colorado, Wyoming and South Dakota, rainfall is unsatisfactory and crops are deteriorating within 3 weeks.

According to the US IAU, wheat exports for the week of April 8-14 amounted to 432 thousand tons, and in total in the season reached 18.067 million tons compared to 22 million tons on this date last year.

May wheat futures in the US rose:

• $ 8.82 / t to $ 411.7 / t for soft winter SRW wheat in Chicago,
• $ 11.39 / t to $ 435.4 / t for winter winter HRW wheat in Kansas City,
• $ 11.21 / t to $ 431.7 / t for drought spring HRS wheat in Minneapolis,
• $ 1 / t to $ 390.75 / t for Black Sea wheat in Chicago.

Russia continues to export grain, despite sanctions imposed on it as a result of the invasion of Ukraine, as Russian wheat remains the cheapest on the market and many buyers are willing to buy it at a discount. According to ICAR, prices for Russian wheat with 12.5% protein delivered in May from Black Sea ports are $ 370 / t FOB, while European and American wheat rose to $ 400-430 / t FOB. This allowed Russia to increase wheat exports from 400 to 630 thousand tons during the week.

The Ministry of Trade and Food of India predicts that in 2022/23 MY the country will increase wheat exports to a record 10-15 million tons compared to 8.5 million tons this season. In the 2020/21 MY, India exported only 2.56 million tons, and for 6 of the last 16 years was a net importer of wheat. However, high world prices increase the income of Indian farmers, which allows them to increase production.