Purchase prices for wheat in Ukraine are falling against the background of a decrease in world quotations and a strengthening of the hryvnia exchange rate

During the week, export demand prices for wheat in Ukraine decreased against the background of falling quotes on US stock exchanges and strengthening of the hryvnia exchange rate on the interbank exchange by 1% to UAH 41/$. Prices are also pressured by a decrease in demand from importing countries, which have harvested good harvests this year, as well as an increase in the supply of cheap wheat from the Russian Federation on the world market.

During the week, the prices of food wheat at the SRT ports of the Black Sea fell by $1-5/t to $195-205/t or 9300-9600 UAH/t, and for fodder - by $1-3/t to 175-180 $/t or UAH 8,200-8,400/t.

Active export of wheat supports prices at a high level. As of July 31, Ukraine exported 1,438 million tons of wheat (758,000 tons in the same period last year) out of the 13 million tons forecast by the USDA for the current season.

As of July 26, 14.7 million tons of wheat were harvested in Ukraine from 3.5 million hectares or 78% of the area with a yield of 4.2 tons/ha. In the western regions, the yield is better, which will allow a total of 19.5-19.8 million tons of wheat to be collected, as predicted by UZA and USDA.

According to Rusagrotrans, export prices for Russian wheat with a protein content of 12.5% and delivery in August rose for the week (for the first time in 2 months) by $5/t to $222/t FOB against the backdrop of increased exports. The forecast for wheat exports in July was raised from 2.5 to 3.3 million tons, which will still be inferior to the 4.5 million tons shipped in July 2023.

Forecasts of a good US wheat harvest are weighing on quotes, with September futures for soft winter SRW wheat in Chicago trading at $193.7/t, the lowest since late 2020.

Heavy rains in France and Germany, and now also in the Baltic states, are delaying harvests and degrading grain quality. Despite this, wheat prices on the Paris Euronext fell 1% for the week to €220.25/t or $238.5/t, adding pressure to Black Sea wheat prices.

According to the European Commission, the export of wheat from the EU in the period July 21-28 decreased by 51% compared to the previous week to 301,000 tons, and in general in the season reached 1.85 million tons, which is 38% lower than last year's pace.

The latest procurement tenders indicate the availability of cheap wheat offers on the world market. Thus, Jordan purchased at an international tender 50,000 tons of hard flour wheat with shipment in October at a price of $256/t C&F, and Tunisia - 125,000 tons of soft flour wheat at a price of $244-246/t C&F and 50,000 tons of hard flour wheat at a price of $323-326/t C&F with delivery in August-October.