Wheat quotes received new support factors
Yesterday in the United States was a day off, and the exchanges did not work, but in electronic trading, wheat prices showed rapid growth on forecasts of hot weather in the Plains regions in the next 5-7 days. European wheat rose in price by 1.2% at the end of the tender in Saudi Arabia, where the purchase price increased sharply compared to previous auctions.
The state agency of Saudi Arabia (SAGO) at the tender, where it was planned to purchase 720 thousand tons of flour wheat for delivery in July – September, purchased only 562 thousand tons, since the average purchase price was 3 300/ton CFR, which is 2 28.5/ton higher than the purchase price at the previous tender on April 5, where 295 thousand tons of wheat for delivery in May – June were contracted.
According to USDA estimates, Saudi Arabia imports 3.2 million tons of wheat in the new season, so its tenders are powerful price indicators for the market.
- At the end of the tender, September wheat flour futures for MATIF rose by 2.5 €/ton to 213.75 €/ton or 2 261.44/ton.
Heavy rains fell in the Southern and Northern Plains of the United States last week, so today's USDA report may show an improvement in the condition of crops. But the temperature increase to 35-37 is predicted for the next 5-7 days OhC against the background of low moisture reserves will adversely affect crops.
Russia has almost completed sowing spring wheat, and higher production forecasts due to precipitation in eastern Siberia continue to lower wheat prices. In addition, the market is under pressure to increase the forecast of Russian wheat exports in June to 600-700 thousand tons (compared to last year's 300 thousand tons) after the reduction of export duties from June 2.
In my 2020/21, as of May 27, Russia exported 32.9 million tons of wheat, which is 9% higher than the same indicator of the previous season.
Prices for wheat of the new crop with protein of 12.5% and delivery in August decreased, according to Icarus, to F 256/ton FOB, and according to SovEcon estimates – to 2 265/ton.
SovEcon experts lowered the forecast of the wheat harvest in Russia from 81.7 to 80.9 million tons due to not very favorable weather for grain crops and a lack of precipitation in the country. Almost 30% of the future crop will be determined by weather conditions in the next few weeks.
At the same time, the Icarus agency raised its forecast for the current wheat harvest in Russia from 78 to 79.8 million tons due to the improvement of the situation in the southern region of the Russian Federation and record sowing areas in the Central District.