Black Sea wheat price behavior: old crop bearish, new crop bullish


RUSSIA. The Russian market of old-crop wheat continued following a bearish trend last week. Export prices for Russian wheat closed the week down on average another $1-2/MT at $208-210/MT FOB for 12.5%-protein, $198-202/MT FOB for 11.5%-protein, and $195-199/MT FOB for feed wheat, Novorossiysk port, June delivery, reports UkrAgroConsult.

As before, the export market is pressured by a slowdown in old-crop wheat sales. The price spread between old- and new-crop wheat has shrunk to $3-4/MT FOB. At the same time, new-crop wheat continues rising in price, unlike the old crop.

Because of the weather factor, forward prices for Russian wheat from the 2018 crop closed the week up on average another $2/MT FOB July-August delivery.

It is worth noting that droughty weather persists in South Russia. In the same period last year, precipitation rates were within or above their normals almost all over Russia. However, significant precipitation shortfalls are observed now in the south and locally in the center of the country.

UKRAINE. Old-crop grain prices either sank or stayed stable this past week.

Export prices for Ukrainian old-crop wheat with 11.5%-protein closed the week down on average another $1-2/MT at $198‑202/MT FOB for June delivery. Prices for 12.5%-protein wheat remained at last week’s levels of $208‑212/MT FOB. These prices are rather nominal because the trade in old-crop wheat is actually over.

Growth of forward prices continues in the market of new-crop wheat. They gained on average another $1-3/MT July-August delivery.

New-crop prices are supported by a surge in new-crop grain sales along with droughty weather in South Ukraine, which may slash potential yields of winter wheat and barley.

More information on price behavior on grain market in the countries of Black Sea region is available to subscribers for weekly market report "Black Sea Grain" and "Online market review" by UkrAgroConsult.



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