The collapse of wheat prices on world stock exchanges increases pressure on purchase prices in Ukraine

Following a sharp decline in world wheat prices, purchase prices for food wheat in Ukraine have already fallen in ports by 200-250 UAH/ton to the level of 300-303 //ton or 9450-9500 UAH/ton, although at the beginning of the year they were supported by a 2.6% decline in the hryvnia exchange rate against the dollar from 27.3 to 28 UAH / т.

The main reason for the fall in prices was the updated USDA report with forecasts of reduced demand and increased supply of wheat. 

Active purchases of wheat by importers last week failed to support the quotes. European sellers were particularly disappointed by the tender in Algeria, where Russian and Argentine wheat ousted the traditional French wheat for this market from the winners.

After the release of the new report, March wheat futures in Chicago fell by 3.9%, in Kansas City-by 6.17%, in Minneapolis – by 5.8%, in Paris – by 5%, for Black Sea wheat in Chicago – by 3.5% amid high stocks and slowing exports from the United States and the EU.

March wheat futures fell on Friday:

• by 0 0.92 / ton to Чикаго 272.5/ton for soft winter SRW wheat in Chicago,
• by 5 5.42 / ton to H 273.7/ton for hard winter HRW wheat in Kansas City,
• by 6 6.34 / ton to 3 322.7 / ton for hrs durum wheat in Minneapolis,
• by 2 2.75 / ton to Чикаго 320.25/ton for Black Sea wheat in Chicago,
• by 2.25 € / ton to 263.5 €/ton or 300.94 європей / ton for European wheat on Paris Euronext.

The Ministry of Commerce and The Grain Council of Iraq purchased 150 thousand tons of Australian wheat at a tender from Viterra at a price of 4 447/ton CIF.

The Algerian OAIS settled the postponed tender and purchased 630 thousand tons of food wheat produced in Ukraine, Romania, Bulgaria, Argentina and Germany on January 13 at a price of 3 348-350/ton C&C. initially, the tender was planned to be completed earlier, but it was postponed, hoping for lower prices after the release of the USDA report. As a result, Cofco, Lecureur, Casillo and CAM sold 90 thousand tons of wheat each at the tender, Olam and Cargill — 60 thousand tons each, ADM — 30 thousand tons. French wheat was not purchased at the tender, as diplomatic tensions in recent months between Algeria and Paris force the OAIS to diversify its sources of wheat supply and abandon the traditional grain supplier - France.

The Iranian state Trading Corporation (GTC) purchased 240 thousand tons of food wheat produced in Russia and Germany at a tender that ended on January 12, with delivery in February – March at a price of 350-364 €/ton or 412.96-417.5 C/ton C&F. Last week, Iran purchased 240 thousand tons of wheat, in December – 740 thousand tons, and in general this year it plans to import 8 million tons of wheat, as its own crop has suffered greatly from the worst drought in the last 50 years.