Rising prices for Russian and European wheat support purchasing prices in Ukraine

Rising prices for Russian wheat led to higher quotes for European and Ukrainian wheat, while American grain prices fell by 1-3% in a month amid declining export demand.

 

According to Rusagrotrans, during the week, export demand prices for Russian wheat with 12.5% protein and delivery in January increased by $7/t to a 2-month high of $235/t FOB against the backdrop of active demand from North African countries.

 

During this time, demand prices for French wheat increased by $2/t to $242/t, for American wheat – fell by $5/t to $244/t, and for German wheat – remained at $254/t on a FOB basis.

 

In Ukraine, against the backdrop of the devaluation of the hryvnia, the demand prices for wheat in the Black Sea ports increased by 50-100 UAH/t to 9950-10100 UAH/t or 209-214 $/t for food wheat, and by 100-200 UAH/t to 9500-9600 UAH/t or 204-205 $/t for feed wheat. At the same time, the demand prices for deliveries to the port of Constanta increased to 227-228 $/t for food wheat and 225-226 $/t for feed wheat, which indicates the potential for further price increases for Ukrainian grain. Processors are actively buying food wheat at 9600-10200 UAH/t with delivery to the mill. Farmers are restraining sales, but traders have also limited purchases, as export demand has significantly decreased.

 

In the 2024/25 MY, Ukraine exported 9.2 million tons of wheat, which is 37% higher than the corresponding figure in 2023 (6.7 million tons), but in the first half of December, exports decreased to 213 thousand tons compared to 814 thousand tons for the same period in December 2023.

 

March wheat futures fell yesterday:

• by 0.4% to $202.1/t – for soft winter SRW wheat in Chicago (-2.9% per month),
• by 0.4% to $205.5/t – for durum winter HRW wheat in Kansas City (-1.4%),
• by 0.3% to $219.8/t - for durum spring HRS wheat in Minneapolis (-0.7%).

At the same time, March wheat futures on the Paris Euronext immediately rose by 1.7% to €233.5/t or $245.4/t (+4.2% per month).

 

European wheat prices were supported by the results of a tender in Saudi Arabia, where the state agency GFSA purchased 804 thousand tons of milling wheat with a protein of 12.5% (including European origin) at a price of $268.87/ton CFR, and the purchase volume turned out to be larger than expected.

 

In the 2024/25 MY, EU countries exported only 10.2 million tons of wheat, which is 29% lower than last year's pace. High prices for European wheat, increased production in Argentina and Australia, and active supplies from the Russian Federation do not give any chance for increasing exports from the EU.

 

Wheat exports from the US increased by 20% to 298,000 tons from December 6 to 12, and in total for the season reached 11.537 million tons, which is 29.4% higher than last year's corresponding figure.

 

The pace of wheat exports from the Russian Federation remains high. In December, it may reach 3-3.5 million tons, and in the first half of the season it will be 28-28.5 million tons, since 25.3 million tons were shipped as of December 1.