Traders moved from speculative selling of wheat contracts to active buying

Speculative price jumps continue on wheat exchanges, due to traders' efforts to find reliable assets where it is most profitable to invest in anticipation of a crisis. Last week, traders actively sold agricultural assets, including wheat contracts, as a result of which prices fell to a 15-month low. However, there are no fundamental reasons for such a fall, so it is purely speculative in nature.

On the news about Russia's intentions to limit the export of wheat, stock market quotations rose again on Friday:

• by 4% or $9.74/t to $253/t - May futures for soft winter SRW wheat in Chicago,
• by 3.4% or $10.4/t to $311.6/t - May futures for HRW hard winter wheat in Kansas City,
• by 1.9% or $5.97/t to $310.5/t - May futures for HRS durum wheat in Minneapolis,
• by 1.06% or $3/t to $287.25/t - May futures for Black Sea wheat in Chicago,
• by 5.8% or €14.25/t to €259.25/t or $279.2/t - May wheat futures on Paris Euronext.

The leader of the price increase was European wheat, the prices of which fell by 15% in a month, so the pullback of quotations was expected. Reducing wheat exports from the Russian Federation will allow the EU to increase exports to the projected 37 million tons, which now looks unrealistic.

U.S. wheat prices are also falling amid improving weather conditions in wheat-growing areas. The quotation was supported by the forecast of the Farm Futures agency, according to which the wheat sowing area in the US in 2023/24 MR will be 45.744 million acres (which will correspond to last year's level), although the previous average estimate of surveyed Bloomberg analysts reached 48.9 million acres.

In Ukraine, purchase prices for wheat fell another $5-10/t during the week to $190-200/t against the background of low export demand and delayed actions of ships to ports. Traders are studying the balance of wheat in Ukraine, as as of March 24, 12.6 million tons of the USDA forecast of 13.5 million tons have already been exported, and at least another 0.5 million tons are planned to be shipped by the end of March, so the volume of transitional stocks is still unknown.