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Fodder wheat deficient in Black Sea region, market sees tight supply
30 July 2020, 11:06
Despite the expected increase in the share of coarse wheat in Ukraine in the 2020 harvest, there are practically no export supply offers, Refinitiv Agriculture reports.
Experts note that the share of low-protein wheat in Russian exports is traditionally low, and the situation has not changed in the 2020/21season.
"Mostly food grains are offered on the Ukrainian market. Food wheat is delivered to ports in sizable volumes, while fodder grains are in demand," a trader explains.
Contract obligations and a rather tight schedule of shipments from ports in July and August secured a stable demand for fodder wheat.
Learn more: New Harvest 2020: First Grain Quality Results
Purchasing prices for fodder wheat have risen to 195 USD/t CPT-Odesa. According to analysts, the spread between the price of fodder wheat and food wheat remains low in Ukraine.
Pursuant to Refinitiv data, the supply of low-protein wheat in Russia is also limited, and the price difference with food wheat is lower from last year's.
"Having no offers for the supply of fodder grains from Ukraine, many importers switched to buying new crop corn. Export contracts for the supply of fodder wheat are uneasy to fill," note the traders.
Since the start of 2020/21, staple grains export shipment from Ukraine has reached 1.14 mln t. As of July 24, agricultural commodities shipment reduced by 1.32 mln t from the prior year's comparative period, 2.43 mln t.
