IKAR in Mass and Industry Media

Black Sea wheat price surges as dry weather slashes crop outlooks

agricensus.com

Black Sea wheat prices surged on Thursday amid another raft of production downgrades for Russian wheat by local analytical agencies, as hot, dry conditions hit yields across key producing regions.

The Russian 12.5% wheat offer price increased by at least $7/mt to $255/mt FOB NTT and has the potential to move even higher, while the bids also followed and increased respectively to $250/mt FOB for September loading.

Ukrainian wheat also followed the move with 11.5% bids for September gaining around $3-$5/mt to $240-$243/mt FOB HIPP, but as the move gained momentum, a lack of offers was reported through the second half of the day.

The movement followed two Russian analytical agencies downgrading their forecasts for Russian wheat output.

Moscow-based Ikar downgraded its previous production outlook by 4.5 million mt to 77 million mt - a 5% reduction.

Alongside that, local consultancy Prozerno also cut its estimate by between 3-4 million mt to 77-78 million mt amid hot and dry conditions observed in parts of the country, including the South, the Volga, and the Ural regions.

Currently, the USDA holds an 85 million mt production outlook, but local trade is starting to fret that the final figure could come in below that.

“Yes, the prices moved sharply higher. It might be a reaction to the crop forecast decrease from Russian analytics,” a trader said.

“All international markets also went up… more analysts talking crop is not more than 80 million mt, but below,” a second trader said.

Last year Russia harvested 85.9 million mt of wheat, and the official forecast from the agriculture ministry for the 2021/22 marketing year stands at 81 million mt.

The ongoing harvest now has a lag from last year and the crops show lower yields than the same period last year.

https://agricensus.com/Article/Black-Sea-wheat-price-surges-as-dry-weather-slashes-crop-outlooks-17693.html

02.08.21

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