Significant export demand keeps wheat prices in Ukraine high

Ukraine's wheat exports were lower in December and January than last year, reflecting a decline in export demand due to rising prices. But competition between exporters and processors for quality wheat is intensifying as farmers curb sales.

 

In the 2024/25 MY, Ukraine exported 10.26 million tons of wheat, which is 25% higher than last year's corresponding figure of 8.2 million tons. At the same time, 344 thousand tons of wheat were exported in the first two weeks of January, which is 63% less than in the same period in 2023.

 

Against the backdrop of increased demand and devaluation of the hryvnia, export prices for food wheat increased by 100-200 UAH/t to 10,300-10,500 UAH/t or $215-220/t, and for feed wheat - by 100-150 UAH/t to 9,850-10,000 UAH/t or $207-208/t with delivery to Black Sea ports.

 

Processors raised prices for high-quality food wheat with gluten above 23%, the quantity of which is limited, to 10,200-10,500 UAH/t with delivery to the mill, and left prices for wheat with lower gluten at 9,600-10,000 UAH/t.

 

The lack of precipitation in Ukraine in December and January, especially in the southeastern regions, worries market participants, so they do not expect a significant decrease in prices in the new season.

 

In the January balance, USDA experts reduced the forecast for wheat exports from Ukraine by another 500 thousand tons and from the Russian Federation by 1 million tons against the backdrop of reduced global consumption and high prices for Black Sea wheat.

 

After a speculative rise caused by frosts in the US, wheat quotes on world exchanges are falling, but forecasts of a new wave of cold weather in the Midwest and Plains of the US, where winter wheat is grown, may push prices up again, as the scant snow cover in the western regions increases the risks of crop losses.

 

March wheat futures moved mixed yesterday:

• increased by 0.2% to $200.7/t - for soft winter SRW wheat in Chicago (+0.7% for the week, -2.6% for the month),
• remained at $206/t for durum winter HRW wheat in Kansas City (+0.7%, -0.1%),
• fell by 0.7% to $216.6/t - for durum spring HRS wheat in Minneapolis (-0.9%, -1.9%),
• Wheat futures on Euronext Paris (+0.2%, +0.8%) fell by 1.2% to €231.25/t or $238.2/t.

 

The seasonal increase in wheat supplies in February-March and the reduction in the risk of winter crop losses will increase pressure on prices at the end of the season, especially against the backdrop of increased sowing areas in the US and the EU.