Global wheat market: Black Sea wheat led the global price decline

 

Chicago Board of Trade (CBOT) March soft red winter wheat futures closed at about $7.
61/bu on Friday, down 4.
5%
from a week ago.
Kansas City Futures Exchange (KCBT) March hard red winter wheat futures closed at about $8.
7075/bu, down 4.
5%
from a week ago.
The Minneapolis Grain Exchange (MGEX) March hard red spring wheat futures settled at about $9.
2125/bu, down 3.
0 percent
from a week ago.
Euronext's March 2023 futures closed at around 307.
75 euros/mt, down 3.
4% from a week ago; Argentine wheat spot quotations were at $405/mt, down 2.
2%
from a week ago.

 

The ICE dollar index closed at 104.
500 on Friday, down 1.
3 percent
from a week ago.

 

Black Sea wheat offers are competitive, exports are growing

 

Turkey's National Grain Agency (TMO) ordered 455,000 tonnes of milled wheat, mainly from Ukraine
, through an international tender.
CNF prices range from $329.
9 to $
344.
Delivery
between December 2022 and February 2023.

 

At Pakistan's 500,000-tonne wheat tender that ended on Wednesday, traders expected Russian wheat to dominate
.
The minimum CNF quote is $372.
00 per tonne for shipments
between December 16 and February 8, 2023.

 

Brazil could import a record amount of wheat from Russia in 2022/23 because of competitive wheat prices
.
In terms of CIF terms, Russian wheat is $22/mt cheaper than Argentine wheat; The spread is wider
at FOB.
The FOB price of wheat with a Russian protein content of 12.
5% is $316.
5/mt, which is $63.
5/mt
cheaper than wheat with a 12% protein content in Argentina.
Russia exported 131,000 mt of wheat
to Brazil in October.
The Brazilian Wheat Industry Association estimates that Brazil's wheat imports from Russia could reach 240,000 tonnes
this year.

 

Brazil imports about 6 million to 6.
5 million tonnes of wheat a year, mostly from Argentina, but severe drought has led to a sharp reduction in Argentina's wheat production to around 12 million tonnes, of which export supplies may be less than 6 million tonnes
.
Brazilian wheat industry association Abitrigo expects Argentina to export 5 million mt of wheat, while many analysts expect exports of just 3.
8 million to 4.
8 million mt
.
Domestic wheat consumption in Argentina is expected to be just over 6 million tonnes
, according to the USDA.

 

Brazil imported just 123,000 mt of wheat from Argentina in October, down from 475,000 mt a year ago and the lowest level in years
.
The ratio decreased by about 10 million tons, resulting in an export supply of less than 6 million tons
.

 

Russian agencies forecast a significant increase in grain exports

 

Russia's grain exports will reach 53-54 million mt
in 2022/23 (July-June), Deputy General Director of the United Grain Corporation of Russia (UGC), speaking at the conference "Trends in Russian Agricultural Development".
She said the forecast takes into account all constraints, including sanctions and infrastructure bottlenecks
.
If it were not for these restrictions, exports could exceed 60 million tons
.

 

In the first quarter of 2022/23, July, August and September, the pace of exports lagged behind the same period
last year, despite a good harvest.
But exports in October, November and December will exceed year-ago levels, making annual wheat exports expected to surpass the previous year to 22.
7 million to 22.
9 million mt, up from 22.
3 million to 22.
5 million mt
in 2021/22.
Bolomatova said shipments of Russian grain exports could reach record levels in December
.

 

U.
S.
winter wheat ratings improved, but remained at historical lows

 

The USDA's last crop progress report of the year released on Tuesday showed that as of Nov.
27, the U.
S.
winter wheat rate was 34 percent, up from 32 percent a week earlier and well above the 28 percent when the wheat rating began at the end of October, the highest value since the release of this year's crop rating report, but still the worst rating since 2012 compared with previous years, so the winter wheat crop is far from out of the woods
.
Precipitation in the arid areas of the southern plains of the United States last week helped improve
winter wheat conditions.
The poor rate as of Nov.
27 was 26 percent, down 7 percentage points from a week earlier, but still tied for the worst rating
in history for the same period in history as of 2012.
As winter wheat enters its wintering period, the next crop rating report will be released
on April 3, 2023.

 

It should be pointed out that spring is the most critical period
to determine the yield of winter wheat.
The southern U.
S.
plains are likely to remain drier than usual this winter due to La Niña, but dry weather patterns could shift
if La Niña turns neutral in the spring, as some agencies predict.

 

Flooding washed roads and blocked Australian wheat exports

 

Just as wheat farmers in eastern Australia were preparing to harvest wheat, torrential rains brought flooding and water accumulation in their fields, causing crop diseases and damaging wheat quality; Now farmers are facing new challenges: roads have been washed away and railways have been damaged
.
Victorian Farmers' Federation president Emma Gemano said the situation was dire and some roads had reached the point where heavy machinery could not pass
.
Due to road conditions, farmers may not be able to get into their fields to harvest their crops, or to truckload their harvested grain to the grain depot
.
The situation is not much
better on the railway side.
Flooding earlier this month derailed a freight train and the Adelaide to Melbourne line was disrupted for about a week
.
Ahead of the harvest season, the current logistical woes are putting more pressure
on fragile supply chains.
Due to rain and muddy roads, the harvest slows down
.
GrainCorp data shows that the amount of grain delivered by farmers in New South Wales and Victoria fell by 56 per cent and 54 per cent
respectively in the week ended 28 November.
But to put it in pain, Western Australia's exports are strong
.
While rains have also slowed harvests in parts of the state, the state's trade associations predict another bumper wheat harvest
this year.
The USDA estimates Australian wheat exports could still reach 26 million mt this year, almost triple the 2019/20 level, when supplies were cut
due to drought.

 

India's wheat harvest is expected to be bumper in 2023 as record high wheat prices encourage increased planting

 

Industry sources expect India's wheat harvest to be bumper in 2023 as wheat prices hit new highs and abundant rainfall replenished soil moisture, prompting farmers to sow more wheat
.
Domestic wheat prices have risen 33 per cent so far in 2022 to a record Rs 29,000 ($355.
19) per tonne, well above the government purchase price of Rs 21,250/mt
.

 

Since the start of the current planting season on Oct.
1, farmers have sown 15.
3 million hectares of wheat, up nearly 11 percent
from a year earlier, according to India's Ministry of Agriculture.