Purchasing prices for wheat in ports fell sharply

The domestic market is also falling - with the exception of Siberia
Purchasing prices at ports fell sharply due to a decrease in the purchasing activity of exporters and high supply. Export prices are also declining, as noted in the materials of the Rusagrotrans analytical center, available to the magazine field.rf.

Export prices

“Export demand prices for Russian wheat with 12.5% protein for delivery in September-October decreased to $242 per ton FOB (-$5). The price of wheat with 11.5% protein is $233 per ton, with 10.5% protein – $217 per ton,” the materials say.

  At the same time, the price of American wheat increased to $253 per ton (+$14), while the price of French wheat remained unchanged at $245.

Analysts note that the wheat exchange market began to strengthen, receiving support from the September report of the US Department of Agriculture (USDA). This month's forecast was bullish for wheat but bearish for corn.

The USDA lowered its forecast for global wheat harvest in the 2023/2024 agricultural year by 6 million tons to 787.3 million tons. The decline in ratings affected Australia, Canada and Argentina. There remains potential for further reductions in forecasts not only for Australia and Canada, but also for Kazakhstan. Rusagrotrans analysts call the estimate of the wheat harvest in the Russian Federation significantly underestimated. USDA predicts the collection at 85 million tons, and Rusagrotrans - 92.85 million tons.

The forecast for global wheat stocks at the end of the 2023/2024 season was reduced by 7 million tons, to 258.6 million tons - significantly lower than average market expectations of 264.4 million tons.

The forecast for the world corn harvest was increased by 0.8 million tons, to 1214.3 million tons. The forecast for global corn reserves at the end of the 2023/2024 season has been increased by 2.9 million tons, to 314 million tons - above average market expectations (310.1 million tons).

The Rosario Grain Exchange (BCR) lowered its forecast for the wheat harvest in Argentina in the 2023/2024 agricultural year by 0.6 million tons, to 15 million tons (BAGE and USDA - 16.5 million tons).

Stratégie Grains raised its EU soft wheat harvest forecast for the 2023/2024 season by 0.3 million tonnes, to 125 million tonnes, and lowered its export forecast by 0.7 million tonnes, to 30.1 million tonnes (in 2022/2023 - 32.3 million tons). The corn harvest forecast was increased by 0.9 million tons to 59.6 million tons, barley - by 0.2 million tons to 47.4 million tons.

In the US, spring wheat harvest was 87% complete as of September 10, slightly above expectations of 86% (87% five-year average). Winter wheat sowing is 7% complete, slightly above expectations of 6% (7% on average).
The share of corn in good/excellent condition dropped to 52% (53% a week earlier), with harvesting completed on 5% of the area (4% five-year average).

Indicative quotes for Russian barley for September-October dropped to $185 per ton (-$5), but purchase prices on the basis of CPT Novorossiysk remained at the level of the previous week - 13,600–13,800 rubles per ton.
Wheat prices in ports and within Russia

Prices for wheat (grade 4, 12.5% protein) in deep-sea ports dropped sharply to 15,000–15,200 rubles excluding VAT (-950 rubles per ton compared to the previous week) amid low demand from exporters who are focused on delivery of already purchased volumes and execution of concluded contracts.

At low waters, acceptance at terminals decreased significantly, indicative demand prices amounted to 12,400 rubles per ton (-1,100 rubles). Last year, prices were 14,600 rubles per ton in deep water and 13,700 rubles per ton in shallow water.

The domestic wheat market declined in the South and Central Russia, but strengthened in Siberia.

Prices for 4th grade wheat (12.5% protein, EXW elevator):

in the South - decreased to 12,500–13,000 rubles per ton (-1,150 rubles),
in the Center - decreased to 9,500–10,000 rubles per ton (-300 rubles),
in the Volga region - remained at the level of 10,900–11,500 rubles per ton,
in Siberia - strengthened to 10,400–11,600 rubles per ton (+300 rubles).

A long period of rainy weather leads to a decrease in the quality of wheat. Prices for 3rd class wheat reach 12,000-13,600 rubles per ton excluding VAT, for fodder - 8,000-8,500 rubles per ton.

Analysts note that a decrease in rainfall in Siberia this week after a long rainy period allowed for faster cleaning, but rain is expected again next week. Dry and warm weather in Central Russia and the Volga region will contribute to high rates of harvesting and winter sowing.