Wheat quotations on world exchanges fell by 2-3.5%, despite problems with the harvest in the Russian Federation

Wheat prices on global exchanges fell 2-3.5% yesterday amid profit-taking by traders, but the overall weekly increase was only 1-2.2%.

The market has not yet reacted to the deterioration of wheat harvest prospects in the Russian Federation and the high rate of export of cheap Russian and Ukrainian wheat, as a result of which the export potential in the second half of the season will significantly decrease.

In eastern Siberia, excessive precipitation led to the introduction of a state of emergency, the death of 200,000 hectares of crops and a delay in harvesting. Wheat is harvested there on 15-20% of the area compared to 35-45% on average at this time. In total, 97 million tons of grain, including 72 million tons of wheat, were harvested from 70% of the area in the Russian Federation. Dry, hot weather in the south-west of the Russian Federation delays the sowing of winter crops, so currently only 5.5 million hectares of the planned 19 million hectares have been sown with wheat.

Statistics Canada's StatCan yesterday lowered its forecast for the wheat harvest in 2024/25 MR from 34.4 to 34.3 million tons (35 million tons according to the USDA forecast), which would be 4.1% less than last year's figure, compared to August estimates.

For September 6-12, the export of wheat from the USA amounted to 556.9 thousand tons, and in general in the season - 6.9 million tons, which is 33% ahead of last year's pace.

According to Crop Progress, as of September 15, 14% of the area in the USA was planted with winter wheat (15% on average), and spring wheat was harvested on 92% of the area (90%).

December wheat futures decreased:

• by 2.9% to $212.56/t – for soft winter SRW wheat in Chicago (+1.8% for the week),
• by 3.5% to $213.3/t – for hard winter HRW wheat in Kansas City (+0.8%).
• by 2.6% to $227.7/t - for hard spring HRS-wheat in Minneapolis (+2.2%),
• by 2% to €220.5/t or $245.3/t - for wheat on the Paris Euronext (+1.1%).

In the Russian Federation, export prices for wheat remain at the level of $217-220/t FOB, while the price of Ukrainian wheat against the background of increased demand has risen to $220-225/t FOB, and for Romanian and Bulgarian wheat - to $230/t FOB.

In Ukraine, export purchase prices during the week increased by $2-3/t to $202-206/t or UAH 9,400-9,500/t for food and $183-185/t or UAH 8,600-8,650/t for fodder wheat with delivery to the Black Sea ports.

In FY 2024/25 (as of September 16), Ukraine exported 4.75 million tons of wheat (which is 68% ahead of last year's rate of 2.826 million tons) out of the 15 million tons predicted by the USDA and 16.2 million tons agreed by the Memorandum.

The reduction of the wheat harvest in the Russian Federation and the dry weather in the east of Ukraine will reduce the volume of offers from producers, which will lead to an increase in the prices of Russian wheat and its main competitor on the markets of North Africa - European wheat.