Ukrainian market review from Spike Brokers

During the week, wheat prices fell on all major exchanges under the pressure of the new USDA report, which increased the estimate of wheat stocks. In addition, forecasts of stable production in the EU, Argentina and the Russian Federation form a comfortable balance at the start of the new season. Funds are reducing long positions (-14 thousand contracts on MATIF for the week), which puts pressure on quotes. At the same time, the decrease in geopolitical tensions and the fall in oil prices have reduced the risk premium that previously supported prices.

 

In the physical market, buyer activity remains low even amid falling prices, and most transactions are episodic in nature. Importers expect prices to decline under the pressure of large inventories and the approaching harvest of the new crop.

 

In Ukraine, during the week, export prices for wheat fell by 11.5% from $222 to $219/t CPT Odesa, and for feed wheat - from $216 to $215/t, while FOB prices remained in the range of $233-235/t.

 

Corn prices are also falling amid favorable weather in the US and significant stocks at the start of the new season.

 

Corn exports from Ukraine amounted to 816.6 thousand tons, and the main buyers were Turkey (265 thousand tons), Italy (148 thousand tons), Spain, the Netherlands, Tunisia and Belgium. Deliveries are made mainly to the EU or the Mediterranean, which ensures stable physical demand, especially since the logistical situation in ports is improving.

 

Oilseed markets remain under pressure from stable demand for meal and falling demand for oil following lower oil prices. EU sunflower oil prices remain at $1,475/t FOB.

 

In Ukraine, sunflower prices increased by another $3/t to $722/t delivered to the plant, which, against the backdrop of falling oil prices, reduces processing margins and forces plants to reduce purchases.

 

Exports of sunflower meal in April have already exceeded 60 thousand tons, and the main buyers were the EU countries (Poland – 9.4 thousand tons, the Netherlands – 9.9 thousand tons) and Asia (China – over 16 thousand tons). At the same time, only 17 thousand tons of sunflower oil were exported, of which 8.9 thousand tons to Poland and 5 thousand tons to Spain.

 

Rapeseed quotes on MATIF traded within €490-500/t during the week, reacting little to oil price jumps. In the physical market, short-term demand is decreasing, and the balance between supply and demand remains stable.

 

Ukraine exported only 9,000 tons of rapeseed in April, indicating a reduction in stocks. The market is expecting new crop rapeseed, the prices for which with delivery to Germany are offered 10 €/ton lower than August futures on MATIF.

 

The imbalance in the soybean market is also increasing, as demand for meal remains high while demand for oil is falling. On the EU physical market, soybean oil prices remain at €1,185-1,225/t.

 

In Ukraine, soybean prices are $439/t CPT – port and $495/t (including VAT) with delivery to the factory.

 

In April, soybean exports amounted to 32 thousand tons (the main buyers were Turkey 7.1 thousand tons and the EU), and soybean meal - 41 thousand tons (Poland 19.3 thousand tons), while 17 thousand tons of soybean oil were shipped mainly to EU countries.