World wheat prices are falling, but they continue to rise in Ukraine
US wheat prices fell sharply yesterday on rumors of Chinese buyers canceling a number of wheat contracts. They were not supported even by the US MSG data on the increase in export inspections for the period from December 29 to January 4 by 77% compared to the previous week to 491,000 tons. In the current season, the USA exported 10.13 million tons of wheat, which is 19% less than last year's pace (12.1 million tons).
March futures fell yesterday:
- by 3.4% to $219.1/t - for soft winter SRW wheat in Chicago,
- by 2.1% to $226.1/t - for hard winter HRW wheat in Kansas City,
- by 1.4% to $258.1/t - for hard spring HRS-wheat in Minneapolis,
- by 1% to €218.5/t or $243.9/t - for wheat on the Paris Euronext.
The market did not react to forecasts of a sharp cooling in the main wheat-growing regions, because it will be short-lived.
Experts on the BAGE exchange raised the forecast for the wheat harvest in Argentina to 15.1 million tons thanks to high yields, while the USDA estimates it at 15 million tons.
In Ukraine, the stable operation of the Black Sea corridor reduces the cost of freight and insurance risks, which increases the export demand for wheat. At the beginning of the week, 39 ships were being loaded in the ports of Odesa, Chornomorsk and Pivdenny, and another 84 will enter the ports in the near future.
In the current season (as of January 7), Ukraine exported 7.804 million tons of wheat (8.604 million tons for this period last year), so the export forecasts can increase from 12.5 to 14-15 million tons.
Purchase prices for fodder wheat delivered to Black Sea ports rose to $158-160/t or UAH 6,500-6,550/t, and for food wheat to $180-185/t or UAH 7,500-7,700/t. However, prices have the potential to rise, given the increase in the cost of feed wheat delivered to the ports of Romania to $205-210/t.
Until Friday, the wheat market will remain waiting for the new USDA report, so significant price fluctuations should not be expected.
