After a two-month speculative rise in wheat prices due to reduced yields in Russia, last week prices actively declined due to profit-taking by traders. The decline accelerated following news of Turkey's wheat import ban and Egypt's reduced import forecast.
An additional factor was the announcement by Russia's Deputy Minister of Agriculture about reseeding 800 thousand hectares of spring crops and minimizing the impact of frost on production.
On Friday, July wheat futures fell:
- by 2% to $230.6/t for SRW wheat in Chicago (-8.2% for the week),
- by 1.8% to $244.6/t for HRW wheat in Kansas City (-6.5%),
- by 1.8% to $255.2/t for HRS wheat in Minneapolis (-6.6%),
- by 3% to €243.75/t or $262/t for September wheat futures on Euronext in Paris (-6.4%).
Turkey's Ministry of Agriculture and Forestry announced that from June 21 to October 15, 2024, the country will cease wheat imports to support local grain producers. Turkey has a good grain harvest and high carryover stocks, so the authorities decided to support their farmers. However, the economic situation in Egypt and Turkey, major importers of Black Sea grain, remains challenging, with a severe currency shortage.
Egypt's Minister of Supply and Internal Trade, Ali Al-Moselhi, stated that the government plans to reduce wheat imports in 2024 by 17% to 5 million tons, compared to the previously planned 6 million tons. This is due to increased domestic purchases and rising prices for subsidized bread, reducing the country's import needs.
These decisions will significantly reduce demand for Russian wheat, which has already supplied 6.7 million tons to Turkey and 7.4 million tons to Egypt this season.
During the week, wheat purchase prices in Ukraine fell by $3-5/t after reaching a season-high of 9700-10000 UAH/t or $215-220/t for food wheat and 9100-9300 UAH/t or $198-203/t for feed wheat with delivery to Black Sea ports. However, limited old crop supplies and active exports will support high price levels.
As of June 7, in the 2023/24 marketing year, Ukraine had already exported 17.65 million tons of wheat, 2 million tons more than the previous year. By the end of the season, another 400-500 thousand tons are expected to be shipped, exceeding the USDA forecast of 17.5 million tons.
