Wheat prices continued to fall yesterday, but will rise again after today's port attacks

Speculative jumps in wheat prices continue on the world market, provoked by the Russian Federation, which is trying to sell its harvest at the best prices, for which it blocks exports from Ukraine. Chicago soft wheat prices rose 12% in the week before last amid shelling of Danube and Black Sea ports, but fell 16.9% last week, including 8.2% over the last two sessions on news of the so-called breakout of the three ships to the ports of Ukraine, although in fact they did not go to the Black Sea ports, but to the Danube ports.

On the night of August 2, the Russian Federation once again attacked the Danube ports with drones, the damage to which will once again stop supplies from Ukraine to Constanta, and will also lead to an increase in the cost of freight.

In July, Ukraine exported 758,000 tons of wheat (36,000 tons in July 2022), of which 61% went through the Danube ports.

Yesterday, September futures fell:

• by 2.1% to $239.7/t - for soft winter SRW wheat in Chicago (-16.9% for the week),
• by 1% to $295.6/t - for HRW hard winter wheat in Kansas City (-13.5%).
• by 0.1% to $314.1/t - for hard spring HRS-wheat in Minneapolis (-9%),
• by 0.2% to $239.75/t – for Black Sea wheat in Chicago (-1%).
• by 1.7% to €236/t or $259.2/t - for wheat on the Paris Euronext (-10.9%).

The Russian Federation published official harvest data, according to which on July 31, 37.4 million tons of wheat were threshed from 9.2 million hectares or 31% of the area with a yield of 4 tons/ha, although 19% of the area was threshed last year. Areas of winter wheat sowing decreased, and spring wheat - increased by 6%. The state of spring wheat in the east of the Russian Federation has improved thanks to the July precipitation, so local agencies have increased the harvest forecasts to 87-87.5 million tons.

The state-owned Algerian company OAIC purchased 590,000 tons (according to some reports, up to 800,000 tons) of soft wheat of Black Sea origin (mainly Russian, Romanian, and Bulgarian) at a tender on July 31 for delivery on October 1-31 at a price of $276/t C&F.

The war in Ukraine remains the main factor affecting world wheat prices. However, Russian wheat is the cheapest on the market, so many countries continue to buy it despite sanctions, as well as cheap Russian oil.