How will the increase in exports from Russia and harvesting in Australia affect wheat prices in the near future?

After the Russian government announced the introduction of export quotas from January 1 and an increase in export duties if world wheat prices reach the level of 4 400/ton, Black Sea wheat futures last week reached a record 3 354/ton.

The price increase should increase the volume of Russian wheat supplies on the world market, which will coincide with the increase in wheat supplies by Australia, whose harvest forecasts are rising to a record level last year. Australia is stepping up wheat harvesting, but in some regions work is delaying precipitation, which, however, will increase yields.  

Russia increased wheat exports to 700 thousand tons in a week, and in general in the season – to 16.6 million tons, which is 16% lower than last year's pace, although recently the gap reached 30%.

In the US, wheat exchanges are traded in a variety of ways. Export sales for the week ended November 4 amounted to only 285.9 thousand tons, but export inspections in the period November 5-11 increased by 55% compared to the previous week to 388.7 thousand tons, which exceeded expert expectations.

Due to precipitation, the number of winter wheat crops in the United States that are in good or excellent condition increased by 1% to 46%, which corresponds to last year's level. 94% of the area is sown with winter wheat, which corresponds to the average 5-year indicator.

December US futures rose yesterday:

• by 3 3.4 / ton to Чикаго 303.6/ton for soft winter SRW wheat in Chicago (+7.3% for the week and 12.1% for the month),
• by 1 1.1/ton to H 307.2 / ton for hard winter HRW wheat in Kansas City (+6.9% for the week and 11% for the month).

At the same time, December futures declined:

• by 8 8.63 / ton to 3 377.2 / ton for durum spring hrs wheat in Minneapolis (+1.9% for the week and 6.2% for the month),
• by 1 1/ton to.352 / ton for Black Sea wheat on Chicago SWOT (+2.8% for the week and 7% for the month).

According to FranceAgriMer, as of November 8, 87% of the area was sown with winter wheat in France, which corresponds to last year's level.

• December wheat futures on Paris Euronext yesterday fell by 2.5 €/ton to 294.75 €/ton, but due to the depreciation of the euro to 1 1.1374/€, the dollar price fell to 3 335.3/ton, which is 1 17/ton lower than the value of Black Sea Futures.

In Ukraine, purchase prices for food wheat increased in ports to 9250-9400 UAH/ton or 315-318 $/ton against the background of high export demand and problems with delivery due to the lack of railcars and high cost of road transportation. Producers expect lower transportation prices and are ready to boost sales amid high wheat prices, although some expect them to grow further due to the poor condition of winter crops. Precipitation this week will replenish soil moisture reserves and increase the number of vehicles for transportation to ports, which is currently occupied in the fields for harvesting corn.