Strong competition lowers prices on black sea wheat

a Good harvest of wheat in Ukraine, Romania and Russia will force traders to lower prices in fight for customers. Also on the physical markets under pressure from the decline of quotations at stock exchanges of the US and the EU.

• September futures on French wheat on Tuesday fell 1.25 €/t to 3-week low of 177 €/t or 199,82 $/t

a Decline in prices for French wheat increases the hopes of the traders to win the tenders in Tunisia and Algeria.

the Market for U.S. wheat continues to fall on the background of the accelerated harvesting of winter wheat. For three days, the July wheat futures in Chicago lost 16,17 $/t and updated 3-week low. However predictable this week, precipitation on the Southern Plains may again slow down the harvest.

the July wheat futures in the U.S. fell:

at 3,95 $/t to 155,79 $/t for solid winter HRW wheat in Kansas city

by 4.87 $/t to 194,74 $/t on a firm spring HRS wheat in Minneapolis.

• 3.86 $/t to 185.00 $/t for SRW soft winter-wheat in Chicago

Yesterday, the Egyptian GASC on the ground in the new season tender purchased 60 thousand tons of Romanian wheat from company CHS delivery 2-12 August at a price 196,71 $/t + freight 13,75 $/t = 210,46 $/t CFR, which corresponds to the price of the previous trading session. Had purchased the party shows that GASC was expecting to buy cheaper grain.

Offers of Russian wheat were at 2-4 $/t higher than at the last tender, however, won only the cheapest application of Romanian wheat.

Yesterday announced a tender for the procurement of wheat by Algeria and Tunisia, which are mainly oriented to French wheat, and Japan plans to purchase 123 thousand tons of Australian, canadian or American wheat.

In dry weather, the Ministry of agriculture of the Russian Federation leaves the forecast of grain harvest in 2019 at the level of 118 million tons, while in the South winter wheat yield is quite high. The quality of wheat is better than last year and an increase in supply put pressure on prices. Bid prices for wheat with protein of 12.5% fell into the $2-3/t to 195-196 $/t FOB.

Ukraine wheat with protein 11.5% of the offer 185-188 $/t FOB coarse – at 178-179 $/t FOB. High quality grain reduces offers of French wheat, which will have a high demand for reduction in the supply of maize on the world markets.