Black Sea wheat market doesn’t seem to believe in export disruptions

What do weaker Black Sea wheat quotes could be telling Chicago and Matif?

12.5% wheat prices in deep-sea Russian ports decreased by $7 to $316/mt last week, as per SovEcon’s assessment.  The Black Sea market was under pressure on ample supply and a good crop outlook for the new Russian wheat crop.

We have updated our 2022 Russian wheat crop forecast recently (see a separate report). This winter which is approaching its end has been very favorable for wheat in the country so far.

The ruble market has been moving lower recently and there is still plenty of wheat inside the country. On-farm stocks stood at 24.6 mmt as of January 1, as per Rosstat, which is the highest number since 2017/18.

Interestingly, the Black Sea physical market mostly ignored global benchmarks which rose 1-4% higher on elevated Russia-West tensions last week. Perhaps it assesses the risk of exports disruptions better than Chicago, which rallied more than 3% on Friday after another White House comment about “imminent war in Ukraine”?

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