Wheat rose in Chicago, Black Sea origins caught up with bullish trend in Europe and North America

30 July 2021, 12:54

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Chicago wheat prices rose yesterday, 29 July. The September 2021 futures on the SRW(Soft Red Winter) contract were dealing above USD 7/b but failed to reach mid-July highs, the Agritel consultancy reports.

The largest spring wheat producing state in the US, North Dakota, has suffered from dryness and continues to experience dry conditions. The expected yields could drop by -33% compared to recent years' average. However, market participants note that field observations are in line with USDA's estimates of a 28 b/acre [1.88 t/ha – ed.] yield for the state, analysts write.

As reported, wheat prices in both Russia and Ukraine rose again yesterday. Prices in the region are now catching up with the bullish trend recorded in Europe and North America since the beginning of the week. However, despite this upward adjustment, the price differential remains largely in favour of Black Sea exporters, particularly to Asian destinations. This competitiveness is also improved by the high prices of maritime freight which benefits the closest origins.

"Dry conditions are also supporting soybean and corn prices. However, the upward movement has been challenged by weekly export sales figures that are confirming recent cancellations for the 2020/2021 crop year. However, the volume of 2021-22 corn sales has been quite decent at 529,300 t for the past week. In soybean, new crop sales were in line with expectations. An exceptional sale of 132,000 t was reported yesterday to an unknown destination," the report reads.

As of 30 July, wheat export shipment from Ukraine dropped by 41% YoY to 694 thou. t.

NOTE: SRW wheat is a fall-sown high-yielding class grown over a wide area of the eastern states; these states have diverse weather patterns, which can result in much quality variation. SRW represents about 18% of the total U.S. production.