Wheat quotations fell to a 2-month low, but prices stabilized in Ukraine

Active wheat harvesting in the USA and data on good winter wheat yields in the Black Sea countries, where harvesting has also begun, increase the pressure on quotations.

 

Rains in Australia, Argentina, Ukraine and the Russian Federation improved prospects for the wheat harvest, as a result of which stock exchange wheat quotes fell to a 2-month low, which offset the speculative price increase caused by forecasts of a reduced harvest in the Russian Federation. Yesterday, exchange prices for wheat fell by 1-1.6%, which corresponds to the figure two months ago.

 

According to NASS USDA data, on June 23, winter wheat in the USA was harvested on 40% of the area (21% last year and 25% on average for 5 years). The number of winter wheat crops in good or excellent condition per week increased by 3% to 52% (40% last year), and spring - decreased by 5% to 71% (50% last year).

 

July wheat futures fell yesterday:

• by 1.6% to $203/t - for soft winter SRW-wheat in Chicago (-7% for the week),
• by 1% to $222.4/t - for hard spring HRS-wheat in Minneapolis (-5.5%),
• by 1% to €222.25/t or $238.7/t – September wheat futures on the Paris Euronext (-3.6%).

At the same time, HRW hard winter wheat futures in Kansas City rose by 0.05% to $213.7/t (-4.1%).

 

In the June report, the experts of the MARS agency reduced the forecast of the yield of soft wheat in the EU in 2024/25 MR from 5.92 to 5.86 t/ha, which will correspond to the average 5-year indicator, compared to the May estimates.

 

In Ukraine, purchase prices for wheat last week stabilized at $180-185/t or UAH 8,400-8,500/t for feed grain and $190-200/t or UAH 8,900-9,100/t for food grain with delivery to Black Sea ports. The weather favors the filling of wheat and the formation of food conditions, so the price difference between food and feed wheat of the new harvest will again decrease to $2-5/t.

 

Despite the drought, the MSG of the Russian Federation maintains its forecast for the 2024 wheat harvest at 86 million tons, although the Argus agency lowered its estimate to 79.5 million tons, which is one of the lowest published private estimates.

 

India has begun imposing wheat stock restrictions among retailers and processors to avoid grain hoarding and control prices. The authorities are also considering the possibility of canceling or reducing the 40% duty on wheat imports.

 

Funds increased net short wheat positions in Chicago by 7,616 to 52,732 contracts and in Kansas by 12,636 to 29,044 contracts on June 18, according to a US trader's deferred liability report, indicating traders' expectations for higher prices.