Russia's intentions to restrict wheat exports keep prices for Black Sea grain at a high level

Markets expected that favorable weather and the completion of spring wheat harvesting in Russia, Canada and Kazakhstan would lead to lower prices, but this did not happen. Lower forecasts for wheat production in the United States and news about Russia's intentions to limit exports from February 2022 provided strong support for quotes. The pace of wheat shipments by major exporting countries due to high prices is still lower than last year.

Starting from February 15, 2022, the Ministry of Agriculture of Russia plans to set a quota for wheat exports within the general limit on grain sales, as officials informed exporters at a meeting on September 30. Problems with the harvest in some regions and the threat of rising prices for bread and flour force the Ministry of Agriculture to take measures to regulate the market. Therefore, the Ministry of Agriculture lowered its forecast for wheat exports from Russia from 37.6 to 31.5 million tons.

In my 2021/22, as of September 30, Russia exported 9 million tons of wheat, which is 22% lower than last year's pace and is 29% of the new forecast. The main buyers were Turkey (2.8 million tons) and Egypt (1.5 million tons).

In Ukraine, the Ministry of Agrarian Policy also proposes to limit the export of food wheat within 60% of the total export volume of 25 million tons prescribed in the memorandum, that is, at the level of 15 million tons. according to the Ministry of Agrarian Policy, the share of food wheat this year was 60% compared to 70-80% last year. In my 2021/22, as of October 4, Ukraine exported 9.091 million tons of wheat, which is 372 thousand higher than last year's pace and is 36% of the forecast.

• December wheat futures on Paris ' Euronext rose 1 €/ton yesterday to 265.25 €/ton or 3 307.7/ton.
• December Black Sea wheat futures on Chicago SWOT fell 0 0.25/ton to.323 / ton, although they remain the most expensive compared to European and American wheat.

Export inspections of wheat from the United States for the week increased by 59% to 611.6 thousand tons, which exceeded traders ' expectations. Since June 1, the volume of wheat inspections has reached 8.7 million tons, which is 12% less than last year.

As of October 3, 47% of winter wheat was sown in the United States, which almost corresponds to the 5-year average of 46%.

December US futures rose:

• by 0.46 $/t до 278  $/t for soft winter SRW wheat in Chicago ,
• by0,46 $/t до 341,8 $/ ton for durum spring hrs wheat in Minneapolis 
• and fell by 1,93 $/ t до 277,1 $/ton for hard winter HRW wheat in Kansas City ,

In Russia, sowing is slower than last year, due to the drought in the Volga region. However, in the near future, dry and warm weather will speed up sowing.