Wheat quotations collapsed on hopes of unblocking Ukrainian ports

On Friday, wheat quotations on world exchanges fell by 5-7.7% against the background of the signing of an agreement in Istanbul, which will allow unblocking the export of grain from Ukraine.

But already on Saturday, Russia attacked the port of Odesa with four missiles, 2 of which shot down anti-aircraft defense, and 2 destroyed the infrastructure of the port and led to a fire. This sharply reduced the optimism of traders, who realized that against the background of its own large wheat harvest, Russia will use all means to block the export of grain from Ukraine, so we should not expect a quick recovery of the ports.

After purchasing 640,000 tons of French, German, Lithuanian and Russian wheat at private auctions at a price of $403-405/t C&F, the Egyptian GASC purchased another 120,000 tons of food wheat during direct negotiations with suppliers on July 21. Active purchases indicate that importers do not expect prices to drop in the near future.

The experts of the Buenos Aires Grain Exchange for the fifth time reduced the forecast of wheat sowing areas in Argentina in 2022/23 MR due to unfavorable weather - by another 100,000 hectares to 6.1 million hectares, although back in May they were estimated at 6.6 million hectares. while in 2021/22 MR, 6.7 million hectares were sown, from which a record 22.4 million tons of wheat were harvested. As of July 20, 6.1 million hectares or 96.8% of the planned areas were sown with wheat. Sowing areas will decrease the most in the central regions due to the lack of precipitation and frost in recent weeks, which will negatively affect wheat crops in the country.

On Friday, wheat quotations on world exchanges fell sharply:

• by 6.6% or $17.36/t to $278.9/t - September futures for soft winter SRW wheat in Chicago,
• by 5.3% or $15.06/t to $301.3/t - September HRW hard winter wheat futures in Kansas City,
• by 5% or $15.25/t to $320/t - September HRS durum wheat futures in Minneapolis,
• by 0.9% or $3.5/t to $357.25/t – August futures for Black Sea wheat in Chicago,
• by 7.7% or €25/t to €325.75/t or $332.54/t - September wheat futures on Paris Euronext.

In Ukraine, as the harvest progresses, the low yield in the south is confirmed.

Currently, Ukrainian farmers have threshed:

• 126.8 thousand tons of peas from 75 thousand hectares or 59% of the area with a yield of 1.6 tons/ha,
• 896.4 thousand t of rapeseed from 400 thousand ha or 33% of the area with a yield of 2.24 t/ha,
• 3.8 million tons of wheat from 1.2 million hectares or 19% of the area with a yield of 3.17 tons/ha,
• 2.5 million tons of barley from 811.4 thousand ha with a yield of 3.08 tons/ha.