Strong start to Russian exports

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The competitiveness of Black Sea supply in global tenders continues to hang over wheat markets the latest AHDB grain market report suggests. This is despite the tightening of global wheat supply and demand this season, and the war ongoing in Ukraine. Compounding this is the prospect of plentiful maize supplies, these factors continue to bring a more bearish sentiment into markets.

The USDA currently forecasts wheat exports from Ukraine and Russia this season to total 11.0 Mt and 49.0 Mt respectively. For Ukraine, this is 6.1 Mt lower than last season (2022/23), but for Russia, this forecast is 3.0 Mt higher than last season’s strong pace. Russia is forecast to be the world’s largest wheat exporter yet again this season.

Russian wheat exports have started this season strong, with 30% of this season’s USDA export forecast estimated to have been shipped in the first three months of this season (Jul – Sep). Looking ahead, should this pace continue to stay strong, it could result in continued pressure on global wheat markets as we progress through 2023. Though, how competitive Russian wheat stays for global tenders will be something to watch, considering competitiveness of other Black Sea origins currently too.

Looking ahead for Ukraine, this season to date, 29% of this season’s USDA wheat export forecast has been met. This leaves a pace of 870 Kt a month needed for the rest of the season to meet the USDA forecast. Earlier this week, Ukraine’s navy said another 12 cargo vessels are ready to enter the Black Sea shipping corridor, following at least seven ships entering Ukrainian water in recent days to be loaded. If we continue to see Ukrainian grain move, considering Danube export routes becoming more efficient and the use of Black Sea shipping corridor too, this could also contribute to a more bearish sentiment on the market despite the war ongoing.

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