Global wheat market:wheat prices mostly fell after the signing of the black sea export agreement
By: Date: 2022-07-25 Categories: Internationalfood Tags: ,

On Friday, the Chicago Board of trade (CBOT) September soft red winter wheat period closed at about $7.59 per bushel, down 2.3%from a week ago. The September hard red winter wheat season of the Kansas City Futures Exchange (KCBT) closed at about $8.2025 per bushel, down 2%from a week ago. The September hard red spring wheat season of the Minneapolis Grain Exchange (MGEX) closed at about $8.71 per bushel, down 4%from a week ago. Euronext’s September 2022 wheat milling period was about 325.75 euros/ton, up 0.1%from a week ago. The spot price of Argentine wheat was $420/ton, down 1.9%from a week ago. The US dollar index closed at 106.621 points on Friday, down 1.2%from a week ago.
This week Russia, Ukraine, Turkey and the United Nations signed an agreement aimed at resuming agricultural exports from the Black Sea ports, including Ukrainian grains, Russian grains and fertilizers. Russia and Ukraine are both major grain exporters in the world. If grain exports from the Black Sea ports are restored, it will help improve global supply and alleviate the global food crisis. But Neil, head of Lloyd’s Market Association in London, UK Roberts, transportation guarantee and insurance will be a key part of the future process. Many things still need to be solved, and the insurer needs to evaluate the shipping separately.
Russia has a bumper wheat harvest this year, and the output is expected to reach a record level, boosting the pace of wheat exports. The Russian Grain Association said that Russia had exported 1.2 million tons of wheat in the first half of July, nearly twice the same period last year. After the Russian government changed the calculation method of export tariffs from US dollars to rubles, wheat prices fell sharply, making Russian wheat more competitive. The pace of exports so far shows that although Western sanctions have led to the complex situation of Russian exports such as insurance and transportation, this has not prevented Russia from exporting a large amount of wheat.
According to the July report released by the Canadian Department of agriculture and food, the output of all wheat in Canada in 2022/23 is expected to be 33.719 million tons, an increase of 600000 tons over the previous month’s forecast, with a year-on-year increase of about 56%. Due to the substantial increase in wheat production, the export forecast for 2022/23 was raised to 22.4 million tons from 22.2 million tons last month, which was also far higher than the 14.8 million tons last year. The ending inventory of wheat is expected to be 5.7 million tons, higher than the forecast of 5million tons last month, with a year-on-year increase of 56%.
The US Department of agriculture’s weekly crop progress report showed that as of July 17, the US winter wheat harvest had completed 70%, 63%last week, 71%in the same period last year, and a five-year average of 71%. The excellent rate of spring wheat in the United States continued to improve, higher than market expectations, reaching 71%, higher than 70%a week ago, and far higher than 11%in the same period last year. The weather on the Great Plains was hot and dry in the past week, but it will still be sunny and dry in the coming week, which is very conducive to wheat harvest. Following some rainfall last week, the temperature in North Dakota, the number one spring wheat producing region in the United States, will be lower than normal in the coming week, which is very conducive to the growth of spring wheat crops.
According to the weekly export sales report of the U.S. Department of agriculture, as of the week of July 14, 2022, the net sales of wheat in the United States in 2022/23 was 511100 tons, 50%lower than last week and 10%lower than the four week average. As of July 21, the FOB price of hard red winter wheat in Meiwan is 381 US dollars per ton, the FOB price of soft red winter wheat is 337 US dollars per ton, the FOB price of first-class flour wheat in Rouen port, France is 370 US dollars, the FOB price of wheat in deep sea port of Russia is 360 US dollars per ton, and the FOB price of wheat in upper river region of Argentina is 420 US dollars per ton.
The Buenos Aires Grain Exchange said on Thursday that due to the impact of drought on sowing, the sown area of Argentine wheat in 2022/23 is expected to be 6.1 million hectares, lower than the previously estimated 6.2 million hectares. At present, the wheat sowing work is drawing to a close, with 96.8%completed. The U.S. Department of agriculture predicted in July that Argentina’s wheat output was 19.5 million tons, a decrease of 500000 tons from the previous month, a decrease of 12%from the previous year, because the soil moisture was low and the weather was dry, resulting in the reduction of harvest area.
Agritel, a consultancy, predicted on Monday that France’s soft wheat production in 2022/23 would be reduced to 33.25 million tons, mainly due to bad weather, resulting in a reduction in harvest area. For comparison, the first 2022/23 annual output forecast report released by franceagrimer, the agricultural office under the French Ministry of agriculture last week shows that the French soft wheat output in 2022 is expected to be 32.895 million tons, a decrease of 7.2%from 35.43 million tons in 2021. Franceagrimer said that as of July 18, the French soft wheat harvest had completed 84%, higher than 50%a week ago and higher than the same period last year.
According to the monthly report released by the International Grain Council, the global wheat production in 2022/23 is expected to be 770 million tons, slightly higher than the 769 million tons predicted last month, but a year-on-year decrease of 1.4%. The global wheat trade is expected to be 194 million tons, unchanged from the forecast value last month, slightly lower than 196 million tons last year. The global wheat ending inventory is expected to be 272 million tons, slightly lower than the 273 million tons predicted last month and 282 million tons last year.
Recently, wheat prices have continued to plummet, attracting importing countries to actively enter the market for procurement. This week, the Pakistani government approved the purchase of 300000 tons of wheat, the Bangladesh food administration bought 50000 tons of wheat, and the Egyptian national grain buyer GASC bought about 640000 tons of wheat through direct negotiations on Wednesday, mainly including Russian, French, German and Lithuanian wheat. On Thursday, it bought 120000 tons of Russian and French wheat. After the Philippine import group bought 110000 tons of feed wheat last Friday, two more Philippine buyers purchased feed wheat from Australia this week.