New crop wheat in Ukraine of higher quality, prices seen surging
Ukrainian feed wheat supply is reducing as Black Sea grain quality continues improving, Agricensus informs.
The quality of Black Sea wheat production from both Russia and Ukraine is set to bring a bumper high protein crop to market, pushing feed wheat and other lower protein wheat prices higher, traders said on Tuesday.
With the harvest in the Black Sea region now underway, the quality of grains already available typically have a higher protein than last season in both Russia and Ukraine. The first results from Ukraine's earliest harvest initially suggested poor quality, but as the harvest has got into its stride the quality levels have improved markedly.
“In a typical year, the ratio is 60/40 for milling and feed grade respectively. This season, without counting the spring grains, it is 80/20 so far and the share of feed wheat has decreased,” one market source said of Ukraine's past performance.
While other market sources were less optimistic about the ratio, most agreed that this season will see more milling wheat grade than produced in 2018, with most putting the figure around 65-70% milling wheat.
“Ukraine usually exports feed wheat and 11.5% wheat, but such is the outlook for this season that the country is expected to export 12.5% milling wheat and potentially even higher quality, directly competing with Russia’s crop,” the message says.
The same hot, dry weather that boosted quality in Ukraine’s crop has hit Russia’s harvest, increasing the availability of high-quality wheat in the early stages of the 2019/20 marketing year.
Despite that, Russian 12.5% wheat offers remain stable at the moment, with no sign that sellers are prepared to discount yet – waiting instead for further clarity over the quality and size of this year’s crop.
Previously reported that all wheat planted area for 2019 is estimated at 45.6 million acres (18.21 million hectares), down 5% from 2018 (19.02 million hectares).
