Wheat prices grow due to the forecast reduction of production
In the June balance experts USDA reduced compared with the may estimate of the forecast of world wheat production in 2018/19 MG for 3 million tonnes to 744,69 million tons, while the initial and ending stocks increased by 2 million tons.
the Market was surprised by a sharp decline in forecast wheat production in Russia from 72 to 68.5 million tonnes, while traders hoped for 70-74 mln t. the Reason for the adjustment was the drought in the regions for growing winter wheat and a reduction in the acreage of spring wheat for moisture and holona weather.
the July wheat futures in the U.S.:
by 6.89 $/t to 203,37 $/t for solid winter HRW wheat in Kansas city
1.01 $/t to 217,70 $/t on a firm spring HRS wheat in Minneapolis.
- just 4% or 7.35 $/t to 196,39 $/t for SRW soft winter-wheat in Chicago
compared to the may WASDE report, the experts have reduced the forecast of wheat production by EU countries by 1 million tonnes to 149, 4 million tons against 151,58 million tonnes in 2017. Along with the reduction of harvest in Russia will support the price of European wheat.
the WASDE Report was released after the close of trading in Paris, however, the rates increased due to the results of the Egyptian tender where GASC bought 300 TMT of Russian and 120 thousand tons of Romanian wheat for delivery 15-25 July at an average price 209,7 $/t FOB and 224,51 $/t CFR, which is of 10.44 $/t lower than the price of Ukrainian wheat, that Egypt bought in may.
- September futures milling wheat on MATIF inErosdoes 2.5 €/t to 183,5 €/t (215,55 $/t).
In the total volume imported by Egypt in the last season of wheat, the share of Russian grain was 80%. So it is another victory in the tender demonstrates the high export potential of Russia, backed by large reserves of wheat.