Black Sea wheat prices lower on improving weather

Weather improves in the Northern Hemisphere pushing Black Sea wheat prices lower

Last week, Russia’s average 12.5% wheat prices in deep-sea ports fell $2 to $283/mt, as per SovEcon’s assessment. Wheat prices were under pressure from weaker global benchmarks. May contracts in Chicago and Matif lost around 2%.

Weather improves in the Northern Hemisphere while we are approaching the weather market. Dryness in the US should be offset by the recent timely showers in wheat regions, the outlook for wheat crop remains above average for the EU. The share of wheat in France in G/Ex condition is 88% (64% in 2020).

The Black Sea is a mixed bag. Ukraine looks good and there is substantial improvement in crop conditions in Southern Russia. At the same time, ice-crust has been on fields in the Central Black Earth and the Volga Valley for too long (3-4 weeks) which most likely damaged the plants. Russian RosHydromMet estimates the share of crops in poor condition at 7-9% (4% a year ago).

Wheat bids in Russia’s ports were mainly flat. 12.5% wheat bids in deep-sea ports remained at 14,900-16,000 rub/mt (CPT) (USDRUB 73). The demand is getting firmer and after pause traders are starting to buy in non-southern regions as well.

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