Stock exchange quotations for wheat rose again by 2.2-3.5%, which supported purchase prices in Ukraine

Speculative growth of wheat prices continues on world exchanges, caused by the worsening of the situation in the Middle East, the drought in Ukraine and the Russian Federation, the strike in the USA and the possible blocking of exports from Kazakhstan. During the week, quotations rose by 5.8-7.3% to the highest levels since June.

Yesterday, December futures rose in price:

• by 2.7% to $226.1/t - for soft winter SRW wheat in Chicago (+6% in three sessions),
• by 3.5% to $227.5/t - for hard winter HRW wheat in Kansas City (+7.3%).
• by 2.2% to $238.5/t - for hard spring HRS-wheat in Minneapolis (+6.7%).
• by 2.7% to €233.75/t or $258/t - for wheat on the Paris Euronext (+5.8%).

The strike on the US Atlantic coast has been going on for two days, and while the US Maritime Alliance (USMX) and the International Port Association (ILA) have still not come to an agreement, blocking container traffic, and to some extent, grain exports from the US.

In the east of Ukraine and the south-west of the Russian Federation (the main regions of winter wheat cultivation), significant precipitation is not yet expected, but farmers continue sowing in anticipation of rains.

Rossilhospnadzor warned the MSG of Kazakhstan about the blocking of wheat supplies due to the detection of quarantine objects, although in fact this is a response to Kazakhstan's ban on wheat imports from the Russian Federation. This may lead to a reduction in the export of wheat from Kazakhstan, which is shipped through the sea ports of the Russian Federation.

Prices were also supported by information from some agencies in Australia that due to the recent drought and frost, the wheat harvest in the country may decrease by 1 million tons.

The state-owned Egyptian operator GASC purchased 3.12 million tons of Black Sea (mainly Russian) wheat for delivery from November to April through a private deal. Grain from the Russian Federation continues to dominate in North Africa, which upsets European traders.

The Egyptian authorities raised the price of buying wheat from local farmers to 14,670 pounds/t or $300/t. The government usually buys 3.5 million tons of wheat from its producers and imports another 8 million tons to produce subsidized bread, which is consumed by more than 70 million Egyptians. However, reforming the subsidy system can reduce state imports of wheat.

In Ukraine, this week export purchase prices for food wheat increased by 100-150 UAH/t to 9500-9600 UAH/t to 205-208 $/t, and for feed wheat - by 50-100 UAH/t to 9000-9150 UAH/t t or $193-197/t with delivery to Black Sea ports.

Traders are raising purchase prices amid rising global prices, but export demand remains low due to strong competition from cheap Russian wheat.