Prices for wheat in Ukraine are rising against the backdrop of reduced supply

During the week, purchase prices for wheat in Ukraine increased against the background of a decrease in offers from producers and active export demand, and for fodder wheat rose by 100-200 UAH/t to 6800-7000 UAH/t or $156-158/t, and for food - by 50-100 UAH/t to 7600-7900 UAH/t or $173-178/t with delivery to Black Sea ports.

The victory of Ukrainian wheat at the tender in Egypt intensified the demand for food wheat, of which there was little left at the end of the season.

Farmers, taking advantage of the favorable weather, are actively sowing, and do not have time to sell the leftovers. And precipitation improves the condition of crops and prospects for the future harvest. According to the first forecast of the Ministry of Agriculture, in 2024 the wheat harvest in Ukraine will decrease compared to the previous year from 22.2 to 19.2 million tons.

In 2023/24, Ukraine exported 15 million tons of wheat, in particular in April - 1.17 million tons (0.65 million tons for April 1-17, 2023), and the USDA increased the export forecast from 16 to 17.5 million tons.

The world market is saturated with cheap Russian wheat, which is offered at $210/t FOB, while prices for European wheat are $217-220/t FOB, and for American wheat - $220/t FOB.

In the first half of April, the Russian Federation exported 2.37 million tons of wheat (with a forecast for April of 4.6 million tons), which corresponds to the pace of exports in March.

Exports of wheat from the USA in 2023/24 MR (as of April 11) amounted to 15.9 million tons, which is 9.2% lower than last year's pace. To reach the USDA forecast of 19.3 million tons by the end of the season, another 3.4 million tons or 480,000 tons must be shipped every week.

During the week, July new-crop wheat futures fell 1-3.2% amid favorable weather in the US and Europe, but rose yesterday:

• by 0.1% to $203.2/t - for soft winter SRW wheat in Chicago (-3.2% for the week),
• by 1% to $211.4/t - for HRW hard winter wheat in Kansas City (-2%)
• by 0.6% to $236.3/t - for hard spring HRS-wheat in Minneapolis (-1%).
• by 0.1% to €214.5/t or $228.2/t – September wheat futures on the Paris Euronext (-1.2%).

In the US, 55% of winter wheat plantings are in good or excellent condition, which is the best indicator since 2020, and spring wheat planting rates are higher than last year. In the next 1-2 weeks, the amount of precipitation and temperatures will exceed the norm, which will promote sowing and development of crops.

IGC experts predict that in 2024/25, global wheat production will decrease to 798 million tons, and ending stocks - to 259 million tons, while in the current season they will amount to 262 million tons.