Lower wheat prices partly due to low demand

01-09-2023 | |
Photo: Canva
Photo: Canva

Lower Russian wheat prices and large export volumes are putting pressure on world market prices. This also leads to lower prices on the physical market.

There is currently little trade. Feed suppliers seem to be well covered for the coming month. Growers who determine the moment of sale themselves are hesitant to sell the wheat because the price has taken a few steps back in recent days. Feed wheat is also offered from Germany and France because sufficient feed wheat is also available there.

The harvest period has been quite long and it remains to be seen how the market will develop. In time, it is expected that the price of feed wheat can recover. Developments in the Black Sea region will also be examined. As long as transport by sea is not an option, but grain is taken from Ukraine by train and via the river Danube, this will create pressure in Europe. This is because grain can still ‘hang’ in certain countries along the way.

The quality of the feed wheat crop is not a problem this season, but it is more difficult for baking wheat. Falling numbers, particularly for wheat that was removed from Ukraine after the rain, are disappointing, mainly in the centre of the country. In the south, it was possible to harvest earlier so that more wheat was removed from the country before the rainy season.

Russia leaves a clear mark

Russia has left a clear mark on the world market during this period. According to the Russian agricultural consultancy SovEcon, the Russian wheat market is undergoing a tilt. In the period June to August, Russian wheat prices rose 36%. The average price for wheat is now falling after weeks of price increases. This is because domestic demand for Russian wheat is declining, and supply has increased.

In addition, exporters buy less wheat because stocks are probably sufficiently replenished for the coming period. According to SovEcon, on August 24, more than 60% of wheat had been harvested in Russia. Russia is expected to harvest 92.1 million tonnes of wheat. This estimate has recently been increased by 5 million tonnes.

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