Wheat futures have already fallen in price to pre-war levels

World wheat prices are falling amid active Russian wheat exports and low demand from importers. On the exchanges in Chicago and Paris, wheat is already trading at pre-war levels, and in anticipation of the new USDA report, quotations continue to fall.

According to the USDA weekly report, as of September 10, 87% of spring wheat was harvested in the US, and 7% of winter wheat was sown, which corresponds to the annual average.

For September 1-7, the export of wheat from the USA increased in comparison with the previous week by 88 thousand tons to 406.2 thousand tons, and in general in the season reached 4.754 million tons (6.4 million tons last year).

At the same time, the Russian Federation exported 5.5 million tons in August alone, and plans to export another 5 million tons in September.

Analysts expect the September WASDE report to lower the global wheat production forecast, but overall the balance will remain stable, so there will be no significant fluctuations in the markets.

Yesterday, December futures fell:

• by 2% to $214.8/t - for soft winter SRW wheat in Chicago (-2.5% for the week, -9.4% for the month),
• by 1.1% to $265.9/t - for hard winter HRW wheat in Kansas City (-4.6%, -6.9%),
• by 0.5% to $281.7/t - for hard spring HRS-wheat in Minneapolis (-6.9%, -12.4%),
• by 0.9% to €234.25/t or $251.7/t - for wheat on the Paris Euronext (-0.1%, -5.9%).

In Ukraine, the crisis on the wheat market is intensifying due to the lack of demand for fodder grain and the fall in food prices. Purchase prices for fodder wheat fell to $140-145/t with delivery to Danube ports (but traders almost stopped purchases), $195-200/t with delivery to Constanta, which corresponds to the level of UAH 4,000/t on FCA terms. Processors are actively buying food wheat at the price of UAH 6,000-6,700/t with delivery to the mill, however, low prices for flour are restraining purchases, even against the background of a shortage of quality wheat offers.

In the current season, Ukraine exported 2.3 million tons of wheat (1.6 million tons for the same period last year), however, in the near future, export rates will decrease due to the blocking of Black Sea ports and supplies to neighboring EU countries.