Wheat prices continue speculative growth, approaching December highs

Yesterday, wheat prices on world stock exchanges rose by another 3-3.5% amid active speculative purchases from traders, although fundamental factors in the form of falling export rates and forecasts of inventory growth in major exporting countries are increasing pressure on the market. In addition, weather conditions in Europe, Ukraine and Russia with minor frosts and heavy precipitation contribute to overwintering of winter crops.

If on Tuesday quotes for us wheat returned to the level that preceded the release of the USDA report, then yesterday they rose by another 3.2-3.5% and approached December highs and the psychological level of 8 8/bushel on forecasts of the approach of a cold front, which this week will come to the regions where winter wheat is grown, the crops of which are covered with a minimum layer of snow.

March wheat futures rose:

• by 1 10.1 / ton to Чикаго 292.7/ton for soft winter SRW wheat in Chicago,
• by 1 10 / ton to H 293.9/ton for hard winter HRW wheat in Kansas City,
• by 1 12/ton to.345 / ton for hard spring HRS wheat in Minneapolis.

March Black Sea wheat futures in Chicago also rose 1.7% or 5 5.5/ton to 3 329.5/ton, returning to the level preceding the release of the USDA report, but remain 6-7% cheaper than in December.

In Ukraine, purchase prices for food wheat increased in ports by 2 2-3/ton to 3 303-306/ton, and Hryvnia prices against the background of the growth of the dollar exchange rate reached UAH 9550-9700/ton.

• March European wheat futures on Paris ' Euronext rose 7 €/ton to 274.75 €/ton or 3 311.88/ton yesterday, followed by September futures rose 6.75 €/ton to 253 €/ton.

The pace of wheat exports from the EU continues to fall, and as of January 16, only 15.32 million tons of wheat were exported, which is 5.3% higher than last year's corresponding figure of 14.55 million tons, although last week the advance was 7%.

An increase in Russian wheat supplies to traditional European suppliers ' markets will increase pressure on prices in the second half of the season.

In my 2021/22, Russia increased wheat supplies to Saudi Arabia by 7 times compared to the previous season, to 916 thousand tons, and to Algeria – by 13 times to 363.5 thousand tons.