Stock prices for wheat grow, however physical market is stable
In the wheat market currently, there are two trends: on the exchanges the price of wheat of the new harvest are growing with support from dry weather in key producing countries, while the physical market is calm due to the harvest importing countries and procurement of wheat from local producers.
the Shortage of rain in the wheat belt of the US and projected for the next decade the heat in Ukraine and Russia remain the main drivers of growth of stock prices. Sowing of spring wheat in the United States and Russia has been slower than last year. As of may 21, spring wheat sown in the USA 61% of the forecast against 71% in 2017, and 64% on average for 5 years. In Russia, on may 23, spring wheat sown 6.4 million hectares or 49.3% of the forecast against 65,4% (8.5 million ha) in 2017. The acreage of spring wheat in Russia may be reduced due to dry weather, which will be one of the factors of price increases in early June.
the July wheat futures in the U.S.:
by 4.13 $/t to 202,73 $/t for solid winter HRW wheat in Kansas city
3.31 $/t to 235,89 $/t on a firm spring HRS wheat in Minneapolis.
- 3.49 $/t to 195,11 $/t for SRW soft winter-wheat in Chicago
the Demand for wheat from importers is still low.
Egypt has already collected 3 million tons of wheat, which is 20% higher than last year's rate of harvest. In this season, the country harvested 3.5 million tonnes of its own imports of wheat and 7 million tonnes.
India plans to increase import duty on wheat from 20% to 30% for the support of private producers, who this year will gather to 98.6 million tons of grain, which is 5.2 million tons will exceed the average 5-year average. Wheat imports will be reduced from 6.1 million tonnes in 2016/17 MG to 1.5 million tonnes in 2017/18 MG.
Grain operator Jordan JSSGC canceled the tender for purchase of wheat for lack of proposals.
Turkey, which is a major importer of wheat, may reduce the volume of purchases for the devaluation of the Lira against the dollar since the beginning of the year from 30% to 4.9 liras/$.