Wheat prices in Ukraine are falling in line with the world prices and against the background of higher freight prices

After Russian shelling of Ukrainian ports on the Danube, part of the owners of ships working on the Reni/Izmail - Constanta route refused to cooperate, which led to an increase in freight prices and a drop in wheat purchase prices. At the same time, world prices continue to fall under the pressure of the end of harvesting in the EU and the US and increased harvest forecasts.

Export purchase prices in Danube ports fell by 3-7 $/t during the week to $165-170/t for food wheat, and to $147-150/t for feed wheat. Processors increased the purchase prices for high-quality food wheat by 100-300 UAH/t to 6000-6500 UAH/t with delivery to the mill against the background of low grain quality.

The SovEkon agency raised the forecast for the wheat harvest in the Russian Federation from 88 to 92 million tons, and for exports to 5.1 million tons in August, while 4.4 million tons were shipped in July. This shows that it is beneficial for Russia to block the ports of Ukraine, which in August, it exported only 1 million tons of wheat. The latest tenders in Egypt confirm the existence of a minimum selling price for Russian wheat at the level of $265-270/t FOB, which is set by the Russian authorities to increase the world's dependence on the largest wheat exporter.

In the US, as of August 27, spring wheat was harvested on 54% of the area (48% last year and 63% on average over 5 years), and the number of spring wheat crops in good or excellent condition for the week decreased by 1% to 37% (68% last year).

Starting from June 1, the USA exported 4.03 million tons of wheat (out of the forecasted 19 million tons), which is 21% less than last year's pace.

Yesterday, September futures fell:

• by 0.9% to $216.1/t - for soft winter SRW wheat in Chicago (-2% for the week, -13% for the month),
• by 2.3% to $271/t - for hard winter HRW wheat in Kansas City (-0.5% and -10%),
• by 1.4% to $281.2/t - for hard spring HRS-wheat in Minneapolis (-2% and -12%),
• by 2% to €228.75/t or $247.8/t - for wheat on the Paris Euronext (-0.2% and -8.3%).

Rains in southern Brazil and Argentina have slightly improved the condition of wheat crops, but rainfall deficits persist in central and northern Argentina. Argentina's wheat crop in good or excellent condition rose from 20% to 23% in the week, according to the Buenos Aires Stock Exchange, but crop forecasts could be lowered.