In anticipation of the new harvest, the Russian Federation will intensify wheat exports

The world's largest grain exporter, the Russian Federation, is stepping up exports of cheap wheat to reduce stocks ahead of a new record harvest. This reduces food inflation in importing countries, but increases competition between exporters. Against this background, prices for European and American wheat fell to a 3.5-year low, and China canceled several agreements to buy them.

According to StoneX experts, the Russian Federation can export 4.5-4.8 million tons of wheat in March, which will increase the pressure on world prices.

Russian wheat export prices fell below $200/t this week for the first time since August 2020, marking the lowest March price since 2017, according to Refinitiv.

SovEcon monitoring showed that prices for Russian wheat with a protein of 12.5% fell by $9.5/t last week to $199-202/t FOB, while French flour wheat with a protein of 11% fell from $240 at the end of January /t to $209/t.

Experts expect a further decrease in world prices as a good harvest is harvested in the Northern Hemisphere.

Moisture reserves and the condition of winter wheat crops in the main regions of its cultivation in the USA, in most of Europe, in Ukraine and the Russian Federation are better than last year. However, according to UZA's forecast, against the backdrop of a reduction in sowing areas, the wheat harvest in Ukraine in 2024 will decrease by 14.5% compared to last year to a 12-year minimum of 20 million tons.

May wheat futures fell again yesterday after a slight increase at the beginning of the week:

• by 0.6% to $200/t - for soft winter SRW wheat in Chicago,
• by 1.7% to $215.9/t - for hard winter HRW wheat in Kansas City,
• by 1.3% to $243.8/t - for hard spring HRS-wheat in Minneapolis,
• by 1% to €194.75/t or $211.7/t - wheat futures on Paris Euronext.

In Ukraine, during the week, purchase prices for food wheat rose to $159-162/t or UAH 7,000-7,200/t, and for fodder - by $4-5/t to $145-148/t or UAH 6,100-6,200/t with delivery to the Black Sea ports against the backdrop of active exports and restraint of sales by manufacturers.
For March 1-13, the export of wheat from Ukraine grew by 86% to 989,000 tons compared to the same period in 2023, and in total in the season reached 12.76 million tons, which is 7.5% ahead of last year's pace.

Ukrainian wheat remains the cheapest on the world market, and the increase in the dollar exchange rate by 1.5% per week will allow to increase the hryvnia purchase prices, which will increase the supply.
Representatives of most political groups in the European Parliament propose to urgently introduce sanctions on agricultural products from the Russian Federation and Belarus, since Ukraine finally managed to convince them that an embargo on trade with the Russian Federation will solve the problem of low world prices and speed up the end of the war.