World wheat prices are falling, harvest forecasts are declining, and Turkey is banning imports: a review of the grain market.

During the reporting week, starting from 31.05.24 and ending on 07.06.24, world prices for wheat were declining. Prices for the following types of wheat decreased:

• Soft red winter wheat on the Chicago Mercantile Exchange (CBOT, ZW) fell to 627.50 cents per bushel (-7.52%);
• Hard red winter wheat on the Kansas Exchange (KCBT, KE) decreased to 665.75 cents per bushel (-6.07%);
• Hard red spring wheat on the Minneapolis Exchange (MGE, MWE) reduced to 694.50 cents per bushel (-6.12%);

The contract for corn on the Chicago Exchange (CBOT, ZC) rose to 448.75 cents per bushel (+0.56%). The price of rice in Chicago (CBOT, ZR) increased to $18.17 per hundredweight (+2.83%).

In the global markets, prices for wheat (FOB Black Sea) from Russia remained unchanged at $235.70 per ton (+0.00%). Barley prices remained at $166.50 per ton (+0.00%), while corn prices rose to $171.50 per ton (+1.60%).

In Russia, the wheat index (CPT Novorossiysk) declined to 17072 rubles per ton (-4.15%).

Internal purchase prices for 4th class wheat (12.5% protein) at port elevators of the Black and Azov Seas during the reporting period are as follows:

• Azov – 15500 (0) rubles per ton
• Novorossiysk – 17850 (-1100) rubles per ton
• Rostov-on-Don – 15500 (0) rubles per ton
• Taman – 16850 (-650) rubles per ton
   
• As a result of May frosts, a state of emergency was declared in 10 regions of Russia by a government commission.
• The sowing of spring crops in Russia has been completed on 90% of the planned area, totaling around 50 million hectares. Due to adverse weather conditions, there is a delay of 2-3 days. It is planned to finish sowing by June 10. The total area sown with crops in Russia this year, including winter and spring crops, has increased by 300 thousand hectares and amounts to 84.5 million hectares. According to the Ministry of Agriculture, in a week, some regions in the south and the North Caucasus plan to start harvesting.
• Most of the frost-damaged areas have already been replanted. A total of 21 regions were affected. Frosts led to the loss of over 1 million hectares of crops, approximately 1.2% of the total area. Grain crops suffered on an area of around 700 thousand hectares, expected to result in reduced yields.
• Turkey will ban wheat imports from June 21 to October 15. In mid-April, Turkey was the second-largest buyer of Russian wheat after Egypt. The decision by the Turkish authorities is aimed at supporting local agricultural producers to sell their harvest.
• Grain market analysts continue to lower the harvest forecast for the current year. "SovEcon" reduced its wheat production forecast to 80.7 million tons (from the previous forecast of 82.1 million tons). The company "ProZerno" also lowered its wheat harvest forecast to 80.9 million tons, compared to the previous forecast of 88 million tons submitted in April. Ministry of Agriculture of the Russian Federation has not yet changed its grain harvest forecast but may adjust it if the drought situation in various regions of the country worsens.
• Starting from June 13, 2024, customs duties on wheat will increase, while those on barley and corn will remain zero.
• Only one grain purchase was made from the state intervention fund this week. In total, from 11.12.2023 to 04.06.2024, the state fund purchased 1067 thousand tons of grain worth 15269.3 billion rubles.

KAZAKHSTAN
• This year, spring crops have been sown on 17.9 million hectares with spring crops. Grain crops have been sown on an area of 14.451 million hectares. The total area of agricultural crops this year is 23.8 million hectares, including 13.3 million hectares of wheat. Plantings are carried out in all regions of the country.

UKRAINE
• The spring planting campaign has been completed, spring crops have been sown on nearly 13 million hectares. Grain and leguminous crops have been sown on an area of 5.6 million hectares, including 3.9 million hectares of corn (100.4% of the plan) and 252.7 thousand hectares of wheat (102.6% of the plan).

• Harvesting of grain crops has started in the Mykolaiv region. Farmers have begun threshing winter barley.