Under the pressure of fundamental factors, wheat prices fell by 2.5-4.2%

Yesterday, wheat quotes on world stock exchanges fell immediately by 2.5-4.2% on news about precipitation in the regions where winter wheat is grown in the United States, an increase in the harvest in Australia and South Africa, and the results of a tender in Algeria.

Traders are interested in what quota for wheat exports Russia will set from February 15. If initially it was about 9 million tons , now the figure of 8-11 million tons is being discussed.

A strong cyclone passed through the central and Southern Plains of the United States and the Midwest, bringing rain, and sometimes heavy downpours that replenished soil moisture reserves. However, the amount of precipitation in the regions where winter wheat is grown remains very low, while temperatures exceed normal. Weather factors and the sharp spread of covid in the United States and Europe have increased pressure on prices.

March futures on US stock exchanges fell:

• by 4.2% or 1 11.39 / ton to Чикаго 277.8/ton for soft winter SRW wheat in Chicago,
• by 3.5% or 9 9.65 / ton to H 288.6/ton for hard winter HRW wheat in Kansas City,
• by 1.1% or 4 4.32/ton to.370.8/ton for hard spring hrs wheat in Minneapolis.

The state Algerian agency OAIS purchased 660 thousand tons of flour wheat at a tender for delivery in January – February at a price of 3 372-376/ton of C&F. The main volumes will be shipped from Argentina and the Black Sea countries, and only a small batch from France, although it was previously the main supplier of wheat to Algeria. This news, against the background of a decrease in weekly wheat exports from the EU to 84 thousand tons, led to a collapse in stock prices.

• March futures for European wheat on Paris Euronext yesterday fell by 8.5 €/ton to 275.75 €/ton or 311.2 € /ton, which corresponds to the level of the end of October.

In Turkey, the fall in the lira exchange rate over the past month almost doubled to the level of 15 liras/dollar almost stopped wheat imports from Ukraine and Russia, which increases pressure on the prices of Black Sea wheat.

• March Black Sea wheat futures on the Chicago Stock Exchange after a slight recovery on Monday yesterday fell again by 2.5% or вчора 8.25/ton to 3 331.75/ton, losing 5.5% of the price in December.

In Ukraine and in the south-west of Russia, heavy precipitation and warm air improve soil moisture reserves and the condition of winter crops, especially in the southern regions where vegetation is still ongoing.

However, many traders have stopped purchasing altogether, as they cannot sell expensive Black Sea wheat against the background of falling prices for European wheat and low prices for Argentine wheat, which actively competes with Australian wheat in the markets of Asia and Africa.