World prices for wheat rose by 3.9-5.7%, and in Ukraine reached the highest level since the beginning of the full-scale invasion

After a speculative increase in price during the month by 15-20%, wheat quotations fell by 4-5.5% last week, but yesterday speculative funds again began to actively buy futures, thanks to which prices rose by 3.9-5.7%. Traders are watching the weather conditions, especially in the Russian Federation, where in April frosts damaged the drought-weakened frosts, and there will be no precipitation in the next 10 days, and so far they are ignoring the positive news about the wheat harvest in France and the USA.

July futures for new harvest wheat rose yesterday:

• by 5.7% to $253.1/t – for soft winter SRW wheat in Chicago (+0.2% for the week),
• by 5.3% to $256/t – for hard winter HRW wheat in Kansas City (-0.5%).
• by 3.9% to $271.6/t - for hard spring HRS-wheat in Minneapolis (+0.1%).
• by 3.9% to €256.5/t or $278.5/t – September wheat futures on the Paris Euronext (-0.9%).

No significant precipitation is expected in Ukraine during the week, but the recent frosts did almost no damage to the crops. During the week, export demand prices for food wheat increased by UAH 400-500/t to UAH 8,800-9,100/t (corresponding to the pre-war price level) or $195-202/t, and for fodder wheat by UAH 500-600/t to UAH 8200-8300/t or $180-184/t with delivery to Black Sea ports.

The export of wheat in the 2023/24 MR reached 16.64 million tons (8.9% more than last year), with 866,000 tons shipped during May 1-20 (880,000 tons for the same period last year), which supports prices

In the Russian Federation, agrarian news talks about "deterioration of the condition of crops after spring drought and frosts, as a result of which the yield may decrease by 10-30%." The Union of Exporters of the Russian Federation estimates the wheat harvest in 2024 at 86.8 million tons, and exports at 46.9 million tons, while SovEkon the other day estimated the harvest at 85.7 million tons.

According to NASS USDA data, 79% of the planned areas were sown with spring wheat in the USA on May 19 (57% last year and 65% on average over 5 years). During May 12-19, the number of winter wheat crops in good or excellent condition decreased by 1% compared to the previous week to 49% (31% last year). The weather in the United States with mild temperatures and abundant precipitation favors the development of crops.

The export of wheat from the USA for May 10-16 decreased by 46.4% to 205.6 thousand tons, and in total in the season reached 17.87 million tons, which is 6.8% lower than last year's pace.

FranceAgriMe experts increased the forecast of the final stocks of soft wheat in France in 2023/24 MY from 3.75 to 3.9 million tons, which will exceed the indicator of 2022/23 MY by 53.6%. At the same time, the forecast for its export to the EU countries was reduced from 6.28 to 6.25 million tons, and increased from 10 to 10.05 million tons outside the EU. It is expected that the use of wheat for feed will decrease from 4.65 to 4.58 million t due to a decrease in demand.