Wheat prices in Black Sea region escalate following other markets

23 November 2021, 10:20

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Wheat prices are rising further in the Black Sea region in the wake of other markets. This has led to an increase in Russian export taxes to 78.30 USD/t this week, the Agritel consultancy reports.

"The Ukrainian Minister of Agriculture surprised yesterday by posting estimates of corn production this year at 40 mln t, above the range of analysts' estimates. While corn prices in FOB terms are up, domestic prices are currently experiencing harvest pressure," the report reads.

Analysts mark that the 300 EUR/t mark on wheat was crossed yesterday on Euronext and on the physical market, with an all-time high expressed in euros. In addition to the many factors already mentioned to justify this rally, there are now fears about the quality of the Australian wheat, which was damaged by the rains at harvest time. Also, flooding in Canada is causing logistical difficulties, particularly in the ports.

The other cereals like corn and barley are also experiencing an uptrend, they add.

"This unprecedented situation is the result of multiple factors, ranging from fundamentals to geopolitics, and from rising input to energy costs. These different factors will be analysed at the Paris Grain Day conference on 27 and 28 January," Agritel analysts comment.

On the international market, Bangladesh is officially buying 50,000 t of wheat and South Korea about 50,000 t of corn.

Wheat prices on Chicago are trading at their highest level since 2012. One of the reasons for yesterday's rise is the deterioration of the winter wheat crop rating at only 44% of good to excellent compared to 46% last week. 96% of winter wheat is now planted, up 2 points from last week but below expectations.

Previously reported that ARIA Commodities supplied 30,000 t of food wheat to Turkey and 33,000 t of corn to South Korea.

CFG is also working on boosting its shipment of milling wheat to Saudi Arabia. The company's latest shipment totalled 121 thou. t.

Wheat production in Ukraine in 2021/22 reached 32.3 mln t using the average yield of 4.62 t/ha.