Wheat prices in Ukraine remain under the pressure of reduced export demand

On September 3, the Ministry of Agrarian Policy of Ukraine and participants of the grain market signed an addendum to the Memorandum of Understanding, which agreed on the maximum export volumes in the 2024/25 season of wheat and a mixture of wheat and rye (meslin) according to the UCT code ZED 1001 at the level of 16.2 million tons. Also, the parties agreed on monthly monitoring of exports and the possibility of adjusting export limit volumes in January 2025, if necessary. Such a move will increase the pressure on purchase prices for wheat in Ukraine, especially for food, as traders will make purchases taking into account the limitation of shipments in the second half of the season.

 

According to official data, in July - August 2024, Ukraine exported 3.8 million tons of wheat, which exceeded last year's export rates by 87% and was 23% of the limit set by the Memorandum. Domestic flour mills asked the Ministry of Agrarian Policy to set restrictions on the export of food wheat, as its share in the 2024 harvest is quite low.

 

In Ukraine, export purchase prices for wheat with delivery to Black Sea ports remain at the level of UAH 9,000-9,300/t or $195-200/t for food grain and UAH 8,100-8,300/t or $175-180/t for feed grain. At the same time, the volume of offers has increased slightly, as farmers restrain sales of late crops against the background of a decline in harvest.

 

Wheat quotations on world exchanges started the week with growth caused by forecasts of a decrease in the harvest in the EU, as well as active exports from the USA.

 

According to the MSG of the USA, for August 23-29, the export of wheat amounted to 578 thousand tons, and in general in the season it reached 5.736 million tons, which is 31.92% higher than last year's pace.

 

Traders switch to trading December futures, which were traded 3-4% more expensive than September futures, and yesterday they still rose:

• by 2.8% to $208.24/t - for soft winter SRW wheat in Chicago,
• by 1.9% to $211.7/t - for hard winter HRW wheat in Kansas City,
• by 1.1% to $223.1/t - for hard spring HRS-wheat in Minneapolis,
• by 1% to €219.25/t or $242.45/t - for wheat on the Paris Euronext.

 

According to Rusagrotrans, export prices for Russian wheat with a protein content of 12.5% and delivery in September remain at a low level of $216/t FOB, which will allow to increase its deliveries in September-October against the background of rising wheat prices in the EU and the USA. Rising wheat prices in the Russian Federation will support Ukrainian wheat prices, as supplies from Romania and Bulgaria are also decreasing.