World wheat prices are rising, although Russian wheat is becoming cheaper

World wheat prices remain under the influence of various factors, mostly "bearish", and after a slight increase last week, may soon fall in line with Russian wheat prices.

According to the Rusagrotrans agency, export prices for Russian wheat with a protein content of 12.5% and delivery in September fell by $18/t in a week to $310-315/t FOB, and by 13% in a month. In deep-water ports of the Russian Federation, prices for wheat with a protein content of 12.5% fell to 13,000-13,500 rubles/t ($220-230/t), while a year ago they reached 17,000 rubles/t.

The duty on the export of wheat from the Russian Federation has been translated into rubles and is 5,000 rubles/t at an indicative price of $367.3/t. An increase in the share of feed wheat caused by heavy rainfall during harvest has led to a decrease in prices for it to the level of spring 2018.

On the physical market, in addition to the decrease in prices for Russian wheat, the prices of American SRW wheat for the week also decreased by $24/t to $318/t, and for French wheat with 11.5% protein - by $14/t to $329/t FOB.

But even despite the decrease in Russian wheat prices, its export is 25% slower than last year. According to Rusagrotrans estimates, from July to August wheat exports from the Russian Federation may amount to 5.7 million tons, while more than 6 million tons were exported in August 2021 alone. The reduction in exports is due to sanctions from Western countries and a decrease in the number of buyers. as well as the hopes of importers for a further drop in prices as a result of the unblocking of exports from the ports of Ukraine against the background of a record harvest in the Russian Federation.

The experts of the European Commission increased the forecast of the production of soft wheat in the EU in 2022/23 MR by 2.1 million tons to 126 million tons, which will be inferior to the harvest of 2021/22 MR - 130.1 million tons. The forecast of final stocks of wheat was increased by 2 million tons to 15.7 million tons, which will still be lower than the level of the 2021/22 season – 16.6 million tons.

On Friday, the main wheat quotes rose:

• by 1.8% or $5.05/t to $288.3/t – September futures for soft winter SRW wheat in Chicago (+5.3% for the week),
• by 1.6% or $5.24/t to $324.5/t - September HRW hard winter wheat futures in Kansas City (+4.7%).
• by 1.3% or $4.32/t to $328.7/t - September HRS durum wheat futures in Minneapolis (+2.2%).
• by 1% or €3.25/t to €330.25/t or $327.75/t - September wheat futures on Paris Euronext (+4.8%).

At the same time, the September futures for Black Sea wheat in Chicago fell by 4.3% or $14/t to $324/t (-4.6% for the week).

According to analysts of the Buenos Aires Grain Exchange, thanks to favorable weather in Argentina on August 25, 79.9% of wheat crops were in good or excellent condition. However, compared to last year, the wheat sowing area decreased from 6.7 to 6.1 million hectares, so the harvest, according to the USDA forecast, may decrease from 22.4 to 19 million tons, and harvesting will begin already in November.