 Home > Food News > Food Articles > Global wheat market: The outlook for Black Sea export agreements has improved, with wheat prices mostly falling

Global wheat market: The outlook for Black Sea export agreements has improved, with wheat prices mostly falling

 Last Update: 2022-10-12
 Source: Internet
 Author: User

Tags

fast food cartoon

food poisoning duration

Search more information of high quality chemicals, good prices and reliable suppliers, visit www.echemi.com

Foreign media October 8 news: In the week ending October 7, 2022, global wheat prices have mostly fallen, with benchmark Chicago wheat futures falling
back from a three-month high set on Friday.
Market rumors that the Black Sea export agreement could be renewed, helping to cut the risk of rising wheat prices; The outlook for global wheat production improved, and a stronger dollar undermined the competitiveness of U.
S
.
agricultural exports and weighed on wheat prices.
However, Argentine wheat prices strengthened, as drought led to poor
prospects for Argentine wheat production.

On Friday, the Chicago Board of Trade (CBOT) closed at about $8.
8025 a week ago, down 4.
5 percent
from a week ago.
The Kansas City Futures Exchange (KCBT) closed at around $9.
6875 a week ago, down 2.
3 percent
from a week ago.
The Minneapolis Corn Exchange (MGEX) closed at around $9.
68 a week ago with a hard red spring wheat period, down 1.
4 percent
from a week ago.
Euronext's December 2022 period closed at around 348 EUR/mt, down 2.
5% from a week ago; Argentine wheat spot quote at $418/mt, up 2%
from a week ago.

The ICE dollar index closed at 112.
683 on Friday, up 0.
53%
from a week ago.

The outlook for the Black Sea cereal export agreement is cloudy

Chicago markets on Thursday were rumored to have the potential for Russia to extend the Black Sea Grain Export Corridor agreement
, which expires next month.
On July 22, Russia and Ukraine reached an agreement brokered by the United Nations and Turkey, which is valid for 120 days and expires
in November.
Media reported on Friday that U.
N.
Secretary-General Antonio Guterres was working to expand the agreement and extend it for a year
.
U.
N.
spokesman Stefan Duyaric said U.
N.
officials were also working to boost Russian food and fertilizer exports
.
Martin Griffiths, director of the UN Assistance Program, and Rebecca Grispan, a senior trade official, will visit Moscow in about a week to discuss extending and expanding the agreement with senior Russian officials, while also actively removing the last hurdle to boost Russian grain and fertilizer exports
.

Friday's report made clear that the core of the Black Sea export agreement reached on July 22 is to facilitate
Russia's grain and fertilizer exports.
The United Nations will work to promote Russian ammonia exports
.
Ammonia is a key component of nitrate fertilizers
.
After the outbreak of the Russian-Ukrainian conflict on February 24, the pipeline transporting ammonia from the Volga region of Russia to the port of Yuzhny in Ukraine was closed
by Ukraine.
The Ukrainian side had linked the resumption of Russian ammonia exports to the release of prisoners of
war.

On Sunday (October 9), TASS News Agency quoted Russian President Vladimir Putin as saying that Russia is ready to participate in solving the global food problem, contribute to overcoming the global food challenge, and provide necessary assistance to the poorest developing countries
.
It also sends the latest signal
that Russia is likely to continue to participate in the Black Sea Cereal Export Corridor program.
Previously, the market has been worried that the escalation of the Russian-Ukrainian conflict may lead to the end of the Black Sea agreement, so the agreement is expected to be renewed will help reduce the uncertainty
of global supply.

Ukrainian wheat exports so far this year were one-third of the same period last year

Ukrainian cereal exports for 2022/23 (July-June) amounted to 9.
168 million tonnes as of October 5, down from 14.
95 million tonnes
in the same period last year, according to Ukrainian customs data.
Wheat exports between July 1 and October 5 were 3.
21 million tonnes, well below 9.
41 million tonnes
in the same period last year.

As of October 3, wheat sown was 1.
1 million hectares, equivalent to 27 percent of the expected sown area, well below the 3.
1 million hectares
in the same period in 2021, according to Ukraine's Ministry of Agriculture.

Alex Ristasa, CEO of the Ukrainian agribusiness IMC, said on October 6 that crop sown area this winter is unlikely to reach 2 million hectares
.
Wheat and barley production will be reduced by 50-70% year-on-year, and while it can meet domestic demand, the export outlook is not very good
.
Lack of funding for seeding remains a major problem for
farmers as input costs rise sharply as domestic food prices fall, Ristasa said.
He believes that yields and production will fall
sharply next year.
Ukraine's Ministry of Agriculture has yet to officially release a forecast for the area of winter wheat in 2023, although Minister of Agriculture Nikolai Sossky said in August that the area of wheat could fall to 3.
8 million hectares from 4.
6 million hectares
a year ago.
But analysts believe the actual sown area may be much lower than his prediction
.
Taras Vysotsky, the first deputy minister of agriculture of Ukraine, said last month that Ukraine's wheat harvest in 2023 could fall from 19 million tons in 2022 to 16 million to 18 million tons, because the area sown to winter wheat will decline
.
Ukraine consumes about 7 million tons of wheat
every year.

The soil moisture in the agricultural regions of southern Russia is insufficient

Roman Nekrasov, an official at Russia's Ministry of Agriculture, said on Thursday that low soil moisture in Russia's southern agricultural regions poses a risk
to food production in 2023.
Last week's rains eased drought conditions in some areas, allowing farmers to speed up the sowing of winter wheat, but the sowing progress is still lower than it was a year ago
.
The Russian government has not yet released production estimates for 2023
.
Russian officials expect a record 150 million tonnes of cereal production in 2022, including 100 million tonnes of wheat
.

The weather in the plains of the United States is dry and the moisture situation is getting worse

The USDA Crop Progress Weekly Report shows that as of Oct.
2, U.
S.
winter wheat sowing progress was 40 percent, compared with 31 percent last week, 45 percent year-ago and a five-year average of 44 percent
.
Analysts expected winter wheat sowing progress to be 44 percent ahead of the report, with forecasts ranging from 41 percent to 48 percent
.
The winter wheat emergence rate was 15%, 9% last week, 18% in the same period last year, and 17%
in the five-year average.

The USDA Crop Progress Report shows that as of October 2, the proportion of soil surface moisture shortages and very short in the United States was 58%, compared with 54% last week and 46%
in the same period last year.
In the main winter wheat-producing areas, Kansas has a shortage of 86% of the topsoil to a very short supply, compared with 76% last week; Oklahoma 92%, last week, 81%; Texas 68%, last week 68%.

Global wheat production has been raised

Global wheat production in 2022/23 is expected to hit an all-time high of 787.
2 million tonnes in 2022/23, 10.
2 million tonnes higher than last month's forecast and 1% from the previous year, mainly due to higher-than-expected EU wheat production, with favorable weather in Russia and Australia boosting production forecasts
, according to a monthly report released Friday.
Good soil moisture at the time of wheat sowing in Australia, combined with favorable rainfall prospects, will boost Australian wheat production to the second highest in history, second only to 2021
.
This helped offset the decline
in wheat production in Argentina.
Ukrainian wheat production is forecast unchanged and remains at 20 million tonnes, down 38 percent
from the previous year.
The Food and Agriculture Organization of the United Nations estimates global wheat consumption to be 774 million tonnes, up 1.
3 million tonnes
from September.
Global wheat ending stocks will reach 303 million tonnes, up 3.
2% y-o-y to 303 million tonnes, mainly due to improved prospects for wheat production in Russia and increased
inventories.
Inventories in Canada, China and Ukraine are also likely to rise
.

Brazilian wheat production will reach record highs

On October 5, consultancy StoneX expects Brazil's wheat production to reach a record 10 million tonnes in 2022/23, up 21% from the previous forecast of 9.
67 million tonnes and up 21% year-on-year.
Wheat export forecast increased from 2.
5 million tonnes to 2.
8 million tonnes; Wheat imports are forecast unchanged at 6.
2 million tonnes, up 2%
from the previous year.

On October 6, Brazil's National Commodity Supply Company (CONAB) expects Brazilian wheat production to reach 9.
4 million tonnes in 2022/23, up 22% year-on-year.
Wheat imports were reduced from 6.
3 million tonnes to 6.
1 million tonnes; Exports were raised from 200,000 tonnes to 2.
7 million tonnes.

The ending stock for August 2023 was 1.
19 million tonnes
.
So far, 22.
4%
of Brazilian wheat has been harvested.

Brazil exported about 2.
4 million tonnes of wheat in the first half of 2022, more than double the same period last year, due to increased
demand for international imports after the Russian-Ukrainian conflict, according to ANEC, the Brazilian Cereal Exporters' Association.

Rainy weather in Australia can damage wheat quality

Market participants said on Friday that above-average rainfall is expected in Australia's eastern coastal areas over the next 15 to 20 days, and that rainfall in parts of New South Wales between October 10 and 16 will exceed earlier expectations, which could lead to a decline
in the quality of wheat crops in the region.
As La Niña continues to bring heavy rain to Australia for the third consecutive year this year, the Australian Met Office issued a weather warning to parts of New South Wales on October 6, anticipating severe weather
including flash floods in the area.
New South Wales is Australia's second largest wheat producer
.
The state's agricultural department estimates that 10.
2 million tonnes of wheat
will be harvested in 2022/23 (October-September).

Market participants said Western Australia and Queensland are also expected to have rainy weather, which may affect wheat protein content
.

The Australian Bureau of Meteorology said the likelihood of higher-median rainfall in wheat-growing areas in New South Wales and Queensland remained high
in the next two weeks as of Oct.
23.

In Western Australia, the number one wheat-producing state, farmers may start harvesting wheat in late October or early November, but cloudy weather can raise concerns about
crop quality.

This article is an English version of an article which is originally in the Chinese language on echemi.com and is provided for information purposes only. This website makes no representation or warranty of any kind, either expressed or implied, as to the accuracy, completeness ownership or reliability of the article or any translations thereof. If you have any concerns or complaints relating to the article, please send an email, providing a detailed description of the concern or complaint, to service@echemi.com. A staff member will contact you within 5 working days. Once verified, infringing content will be removed immediately.