Prices for wheat, especially European and Black Sea wheat, accelerate the fall under the pressure of a record harvest in the Russian Federation

As wheat is harvested, it becomes clear that the harvest in the Russian Federation will exceed a record 90 million tons. This has led to a collapse in prices within the country and reduced the prices of Black Sea wheat offers, which increases the pressure on European grain quotations.

As of August 15, 67.8 million tons of wheat were threshed from 15.4 million hectares or 52% of the area in Russia with a yield of 4.4 tons/ha, while last year a total of 76 million tons were harvested, and the yield was 34% lower. However, rainy weather can worsen the quality of wheat, so the share of food crops will be only 60% compared to 82% last year.

SovEkon experts increased the forecast of wheat production in the Russian Federation by 3.8 million tons to 94.7 million tons against the background of a record yield and favorable conditions for spring wheat in Siberia.

Exports of wheat from the Russian Federation for 1.5 months of the new season decreased by 13% compared to last year to 4.67 million tons against the USDA forecast of 42 million tons. As a result of the sanctions, the number of buyers of Russian wheat decreased from 45 to 23 countries. Falling demand for Russian wheat will increase pressure on Black Sea wheat prices, but importers will be more active in buying European and American wheat, which will keep prices from falling sharply.

According to NASS USDA data, in the USA, as of August 14, winter wheat was harvested on 90% of the area (97% last year and 94% on average over 5 years), and spring - on 16% (55% last year and 35% on average over 5 years ). According to estimates of the US MSG, the gross harvest of winter and spring wheat will amount to 48.5 million tons, which will exceed last year's figure by 3.7 million tons, but will be 0.6 million tons less than the average 5-year harvest.

Yesterday, wheat prices fell again:

• by 1.9% or $5.42/t to $288.8/t – September futures for soft winter SRW wheat in Chicago,
• by 1.3% or $4.04/t to $320.3/t - September HRW hard winter wheat futures in Kansas City,
• by 0.9% or $2.94/t to $331.7/t - September HRS durum wheat futures in Minneapolis,
• by 1.4% or $5/t to $345/t - September Black Sea wheat futures in Chicago,
• by 2.3% or €7.75/t to €332/t or $337.7/t - September wheat futures on Paris Euronext.

17 ships have already left the ports of Ukraine through the grain corridor, but the pace of exports remains low, as the intensity of deliveries through the western borders has fallen on expectations of the intensification of sea exports, which have not yet worked at full capacity. In the new season, Ukraine exported only 658,000 tons of wheat compared to 2,088 million tons during this period last year.

Demand prices for Ukrainian wheat remain at a low level of $180-200/t delivered to the port, as traders find it difficult to find cheap ship freight from Black Sea ports.

Long rains delay the harvesting of wheat, deteriorate its quality and may lead to a partial loss of the crop.