The EU harvest delay and the new Ishmael port attack are supporting wheat quotes

The rains that have been falling almost every day since the end of July in northwestern Europe are deteriorating the quality and delaying the harvesting of wheat. According to the MARS agency, France, Germany and Benelux are the most affected by the slowdown in harvesting. Heavy rains with hail damaged crops in northern Italy, Croatia and Slovenia. At the same time, in Romania, Poland, Bulgaria and the Czech Republic, the prospects for the harvest are worsened by hot and very dry weather.

However, the forecasts of the yield of the main agricultural crops in the EU in 2023/24 MR have so far been slightly changed. Thus, compared to the July estimates, the forecast for the yield of soft wheat was reduced from 5.8 to 5.78 t/ha, spring barley – from 3.62 to 3.6 t/ha, corn – from 7.53 to 7, 45 t/ha, rapeseed – from 3.2 to 3.19 t/ha, soybeans – from 2.86 to 2.82 t/ha, while for durum wheat the yield forecast was increased from 3.39 to 3.41 t /ha, winter barley - from 5.91 to 5.92 t/ha, sunflower - from 2.12 to 2.18 t/ha.

As a result of another attack on the night of August 23 in the port of Izmail, several private grain terminals and cargo infrastructure were damaged, 13 thousand tons of grain were destroyed. Before that, drones destroyed 35,000 tons of grain in the port of Reni. According to the Minister of Infrastructure O. Kubrakov, after withdrawing from the grain agreement (a month ago), the Russian Federation has already carried out 8 attacks on port infrastructure and destroyed 270,000 tons of Ukrainian grain.

Traders hardly react to the shelling of Ukrainian ports, because they see that despite all the difficulties, Ukraine continues to export grain through the Danube ports.

Yesterday, September futures rose to the level of the beginning of the week:

• by 1.8% to $225.1/t - for soft winter SRW wheat in Chicago,
• by 2% to $277.4/t - for HRW hard winter wheat in Kansas City,
• by 1.4% to $288.3/t - for hard spring HRS-wheat in Minneapolis,
• by 1.4% to €231.5/t or $251.5/t - for wheat on the Paris Euronext.

Analysts expect that in the new report of the Canadian StatsCan, the wheat production forecast in 2023/24 MR will be 29.3-33.1 million tons, on average - 30.4 million tons, which will be 3.4 million tons lower than last year's figure and 2 .6 million tons - according to the USDA's August forecast.

In 2023/24, the EU exported 4.06 million tons of wheat as of August 20, compared to 5.12 million tons on this date last year.

SovEkon experts raised the forecast for the wheat harvest in the Russian Federation in 2023 by 5 to 92.1 million tons (USDA 85 million tons), which increased the pressure on world prices. However, Russian wheat continues to rise in price against the backdrop of government policies and rising freight prices. In the strategic Kerch Strait, shipping delays have increased to 5-10 days, as a result of which a queue of 120-150 vessels has formed, which increases the cost of freight and reduces prices for Russian farmers. A complete stoppage of exports will be the best sanctions for the Russian Federation and will reduce the revenues that are directed to the war with Ukraine. Therefore, the destruction of the Kerch bridge will not only weaken the Russian group, but also block the strait for ships.

According to the head of the Union of Field Growers of Kazakhstan, due to the drought, this year's wheat harvest in the country will not exceed 10 million tons, while MSG estimates it at 16 million tons.

The President of Turkey arrived in the Russian Federation to meet with Putin and discuss the resumption of the grain agreement.