Wheat prices in Ukraine continue to rise, although the fall in world prices is accelerating

Yesterday, wheat prices on world exchanges fell by 1.7-1.9%, having lost 2.5-3.8% for the week, under the pressure of improved crop forecasts in Argentina and Australia, as well as weather in the United States. In Ukraine, prices continue to rise against the background of a shortage of offers, but they may soon decrease following the fall in prices in the EU, which lost 3.3% in a week.

According to the forecast of the Rosario Grain Exchange, Argentina will harvest 19.5 million tons of wheat in FY 2024/25, while the USDA representative in the country estimates the harvest at 18 million tons, as did the USDA in its October report. Exchange experts expect wheat exports to reach 13.3 million tons, which will be the second highest figure after the record 15.4 million tons of the 2021/22 season.

According to Crop Progress from NASS USDA, as of October 27 in the USA, 80% of the area was planted with winter wheat (84% on average over 5 years), and 38% of crops are in good or excellent condition (47% last year). Precipitation predicted for the coming days may improve the condition of the crops. Export of wheat from the USA in 2024/25 MR reached 9.5 million tons, which is 33.5% higher than last year's pace.

Yesterday, December futures fell:

• by 1.9% to $205.3/t – for soft winter SRW wheat in Chicago (-2.5% for the week, -4.6% for the month),
• by 1.9% to $206.3/t - for hard winter HRW wheat in Kansas City (-3.8%, -3.8%),
• by 1.7% to $218.7/t - for hard spring HRS-wheat in Minneapolis (-3.1%, -4.5%).

At the same time, December wheat futures on the Paris Euronext rose by 0.1% to 217 €/t or $234.5/t (-3.3%, -1.8%).

In Ukraine last week, purchase prices for food wheat rose by $1-2/t to $210-214/t or UAH 9,800-10,100/t and for fodder - to $203-205/t or UAH 9,500-9,600 with delivery to the Black Sea ports against the background of a shortage of offers and an increase in the dollar exchange rate.

3.8 million hectares have been sown with winter wheat in Ukraine, but the lack of precipitation delays sowing, especially in the eastern regions.

The decrease in prices for European wheat by $5-10/ton as a result of the fall in the exchange rate of the euro against the dollar limits the growth of wheat prices in Ukraine.

Egypt's GASC is unable to receive the Russian wheat (purchased out of tender in September at a price of $235/t FOB) that was supposed to be shipped in October, as the necessary documents are still not ready and the necessary vessels are not assigned for transportation.

"The traders of the Russian Federation were approached by an intermediary company that stated that it buys grain on behalf of GASC, but this contradicts the practice of public procurement in Egypt, so the traders refused to supply grain," E. Zernyn, head of the Union of Exporters of the Russian Federation, told Bloomberg.

It is possible that now GASC will announce a new tender for the purchase of wheat.