Growth of international wheat prices at the end of August: analysis and forecasts.

During the last week of August, from the 23rd to the 30th, international wheat prices were on the rise. Prices for:

• soft red winter wheat on the Chicago Board of Trade (CBOT, ZW) rose to 532.75 cents/bushel (+6.07%);
• hard red winter wheat on the Kansas City Board of Trade (KCBT, KE) increased to 552.50 cents/bushel (+6.25%);
• hard red spring wheat on the Minneapolis Grain Exchange (MGE, MWE) went up to 573.75 cents/bushel (+3.99%);

The corn contract on the Chicago Board of Trade (CBOT, ZC) rose to 378.00 cents/bushel (+2.79%). The price of rice in Chicago (CBOT, ZR) increased to $15.02/cwt (+0.07%).

Russian indicative prices (FOB Black Sea):

• wheat – decreased to $214.10/ton (-0.42%);
• barley – rose to $179.20/ton (+0.50%);
• corn – declined to $194.80/ton (-0.51%);

The Russian wheat index, CPT Novorossiysk, decreased to 16478 rubles/ton (-1.72%).

Domestic procurement prices for 4th class wheat, 12.5% protein, at port elevators of the Black and Azov Seas for the reporting period:

• Azov – 14200 (-800) rubles/ton
• Novorossiysk – 17300 (+50) rubles/ton
• Rostov-on-Don – 14200 (-800) rubles/ton
• Taman – 16000 (-100) rubles/ton

Until the end of August, Russia expects warm weather with high temperatures, reaching up to 39°C in some places, and intense precipitation in southern regions.

Grain harvest in Russia by 2030 could reach 170 million tons, and oilseed crops – 36.378 million tons, as reported by the Ministry of Agriculture.

The agricultural sector in Russia is facing a shortage of personnel, with 200,000 people leaving the industry since the beginning of 2022, according to the Ministry of Agriculture. In response to this, the ministry plans to create a personnel reserve.

In 2024, less than half of the quotas for the import of agricultural crop seeds have been allocated in Russia. This indicates an increase in domestic production, stated Roman Nekrasov, the Director of the Crop Department at the Ministry of Agriculture.

The Ministry of Agriculture of the Russian Federation plans to maintain seed import quotas from unfriendly countries until 2025. The quota volumes will be determined after analyzing the results of the 2024 harvest campaign.

Domestic prices for Russian 4th class wheat (12.5% protein) have risen to 13925 rubles/ton ($154/ton) since late July, the highest value since May 2024, as reported by SovEcon. The increase in prices is linked to increased demand, currency depreciation, and limited supply as producers hold back sales in anticipation of better prices.

Wheat trading from the state fund is inconclusive. Grain market experts consider this situation predictable, attributing it to the adequacy of grain supply.

Sales of Russian agricultural machinery for January-July 2024 decreased by 10.9% to 127.7 billion rubles, production fell by 7.4%, and exports decreased by 25.2%. The situation is worsening due to low demand, high interest rates, and insufficient funding of government support.

The Union of Flour and Cereal Enterprises expressed concern over the proposal to expand preferential transportation of flour from Siberia to all regions of Russia. It warns that this could negatively impact enterprises in the European part of the country.

The quality of the 2024 crop in Russia has improved compared to the previous year, with the share of third-class wheat increasing to 25% of the verified volume, according to the Grain Quality Assessment Center.

Customs duties on wheat and corn will increase starting from September 4, 2024, while they will remain at zero for barley.

BELARUS
6708 thousand tons of grain and leguminous crops have been harvested (97.9% of the harvestable area) with a yield of 32.4 centners/hectare.

KAZAKHSTAN
One of the highest grain harvests is expected, but prolonged rains are causing problems with harvesting, which may negatively impact quality. Wheat exports this season could reach 10 million tons.

More than 2.2 million hectares of grain and leguminous crops have been harvested, with a total yield of 16.7 centners/hectare, resulting in 3.7 million tons of grain.

KYRGYZSTAN
398.8 thousand hectares of grain (wheat and barley) have been harvested, 83.2 thousand hectares more than last year. Wheat yield is at 29.4 centners/hectare, barley at 26.7 centners/hectare. A total of 1114 thousand tons of grain have been harvested, 439 thousand tons more than in 2023.

UKRAINE
50-60% of the territory is affected by drought, especially in the central, southeastern, and southern regions, hindering winter crops sowing.

Corn harvesting has begun. A total of 28.7 million tons of grain have been harvested, including 21.76 million tons of wheat and 5.5 million tons of barley.