Grain prices still capped by Ukraine and Russian exports

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The competitiveness of Black Sea wheat has been in focus for markets throughout this season, keeping a cap on price gains. Despite the ongoing war in Ukraine, grain continues to leave the country, albeit more slowly than this time last year.

The latest AHDB Grain Market Report shows UK feed wheat futures (Nov-24) gained slightly over the week closing at £209.00/t yesterday, 9th November. May-24 wheat futures closed at £202.70/t.

Russian wheat too has been in focus, after a few big crop years and aggressive export pricing. The Russian grain harvest this season (2023/24) has reportedly reached 147 Mt according to the First Deputy Agriculture Minister, (9th November). This is higher than earlier forecasts of 140 Mt but below last year’s 158 Mt.

For this season, Russia and the EU-27 are forecast as the largest global exporters of wheat by the USDA, with predictions currently totalling 50 Mt and 37.5 Mt respectively. From July to September, SovEcon peg total Russian grain exports at 17.3 Mt – a strong start to the season, including 14.8 Mt of wheat (86% of the total). Total wheat exports from the EU have started more slowly than last season, with soft wheat exports to 02 Nov behind the previous 5-year average by 1.6% (EU Commission customs surveillance data).

In terms of the competitiveness on the global market, Black Sea and EU origin wheat looks well positioned. In a recent tender, Algeria’s state grains agency is believed to have bought 600 Kt – 690 Kt of milling wheat. This is expected to be a mix of Black Sea and French wheat, which pushed Paris milling wheat futures higher yesterday. Refinitiv reports that Russian wheat looks the cheapest, but there was doubt amongst some traders as to whether Russia can provide the volumes needed.

Paris rapeseed futures (May-24) also made slight gains over the week, losing yesterday at €448.50/t.

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