Source: Ukragroconsult (Ukraine)
On September 1, wheat stocks in Ukraine amounted to 18.7 million tons, which is significantly lower than the average annual values of previous seasons, when this figure exceeded 20 million tons. This was reported by analysts from the agricultural cooperative PUSK, which was founded as part of the WAR.
“A memorandum was signed between the Ministry of Agrarian Policy and the participants of the grain market, according to which Ukraine will not export more than 16 million tons of wheat. If 2 million tons per month continue to be exported, there could be enough wheat until March/April. But objectively speaking, there will be little wheat for export, and usually the price increases with a decrease in supply,” the analyst commented. Experts note that the market remained stable in August due to futures contracts, but in September the situation begins to change. Traders report that there is little wheat supply, and if in August it was possible to get through at the expense of forward contracts, in September there are almost no forward contracts. The market will work with spot agreements,” says PUSK.
There are also factors on the world market that could affect wheat prices. The market is awaiting a new USDA report and a correction of EU wheat production data. The differences in the estimates are considerable, as the USDA’s estimate of European wheat production of 128 million tons is significantly higher than the European Commission’s data, which estimates production at 116.2 million tons. In addition, the situation in Argentina, where there are problems with soil moisture due to drought, could have a negative impact on the global wheat balance.
“In the second half of September, the price of third-grade food wheat on the CPT market could rise to USD 200-205 per tonne, even if world market prices remain stable. If the current situation continues, domestic prices could also rise significantly,” predicts the analyst.