Source: Ukragroconsult (Ukraine)
Importers postpone wheat purchases as Euronext prices remained in the €203-212 range throughout the week. Furthermore, the wheat market largely follows financial funds continuing to increase their long positions. Analysts at Spike Brokers reported this.
Price Support Factors and Black Sea Market
Wheat prices are supported by geopolitical risks. Additionally, rising energy prices are driving up production costs. Consequently, this creates a premium in grain markets.
On the physical Black Sea market, prices are also showing moderate growth. Specifically, exporters offer Russian 12.5% wheat at around $239-240 FOB. Meanwhile, Ukrainian 11.5% wheat trades at around $237-238 FOB. Furthermore, buyer activity remains limited. Specifically, importers postpone wheat purchases due to rising freight rates. Additionally, uncertainty in energy markets adds pressure.
Importers Postpone Wheat Purchases: Ukrainian Export Data
According to the SPIKE Spot Commodity Index, export prices to Ukraine increased slightly over the week. On a CPT Odesa basis, wheat increased 11.5% from $218 to $219. Meanwhile, feed wheat rose from $210 to $214. Furthermore, this reflects moderate support for the physical market amid limited supply.
Ukrainian wheat exports from March 1-12 totaled approximately 232,900 tonnes. The main buyers were Algeria (93,000 tonnes), Egypt (69,000 tonnes), and Israel (31,000 tonnes). Furthermore, this confirms continued strong demand from North Africa and the Middle East.
At the same time, shipment rates remain below potential export capacity. At the current rate of shipments, March exports could only reach approximately 600,000 tonnes. Consequently, this raises the possibility of huge carryover wheat stocks in the Black Sea region at the season’s end.