Wheat prices fell in anticipation of the release of exports from Ukraine

Turkey has once again acted as a mediator in resolving the Russia-Ukraine conflict, which is hurting the world. In a telephone conversation with Putin, President Erdogan agreed to hold a meeting on June 8 with the participation of Russian Foreign Minister Lavrov on the unblocking of Ukrainian ports. Russia, in exchange for promoting the unimpeded export of grain from Ukrainian ports, is demanding the lifting of Western sanctions against the insurance sector, which is blocking Russian cargo services. It has previously promised "green corridors" for foreign ships to leave, but they remain in ports due to the threat of shelling and landmines.

Wheat quotations reacted to this news yesterday by falling by 3.7-6.9%:

• 6.9% or $ 25.72 / t to $ 399.6 / t - July futures for soft winter SRW wheat in Chicago,
• 6.4% or $ 25.6 / t to $ 428.2 / t - July futures for winter winter HRW wheat in Kansas City,
• 4.8% or $ 21 / t to $ 458.4 / t - September futures for drought spring HRS-wheat in Minneapolis,
• 2.3% or $ 9.25 / t to $ 400.25 / t - July futures for Black Sea wheat in Chicago,
• by 3.7% or € 14.5 / t to € 392.25 / t or $ 420.47 / t - September wheat futures on Paris' Euronext.

The war between the world's two main producers and exporters of wheat remains the main factor influencing prices, and any news of prolonging the conflict or resolving the export problem leads to a change in quotations by 5-6%.

In May, Ukraine exported only 42,000 tons of wheat (16,000 tons in April) compared to 700,000 tons in May 2021. It is almost impossible to increase supplies across the western borders, as EU countries will start harvesting in July, so they will not be able to cross also Ukrainian grain.

According to the forecast of the Ukrainian Grain Association, in 2022/23 MY Ukraine will harvest 20.1 million tons of wheat compared to 31.4 million tons in 2021/22 MY.

In the United States, as of May 29, 73% of spring wheat was sown and 42% of seedlings were up from 92% and 69%, respectively, on average over 5 years.

During the week of May 20-26, wheat exports from the United States amounted to 343.9 thousand tons, and in total in the season reached 19.995 million tons, which is 21% or 5.3 million tons lower than last year. As of June 1 (the beginning of the new season), exports will reach 20.2 million tons, although the USDA estimated it at 21.9 million tons.

Precipitation in the United States, Ukraine, and France has somewhat improved wheat, which has helped reduce quotations.

Coceral experts raised the forecast for wheat production in the EU in 2022/23 MY by 0.5 million tons to 127.4 million tons (129.8 million tons in 2021/22 MY), but left the forecast for the harvest of hard varieties at 7.7 million tons (7.8 million tons last year).

Jordan bought 60 thousand tons of wheat from CHS at a price of $ 499.5 / ton C&F with delivery in August, and Egypt will hold a tender today.