Following a brief decline, export prices for wheat in Ukraine witnessed a slight uptick in hryvnia, thanks to a rapid surge in the dollar exchange rate. This development, occurring over a span of two days, saw a 1.3% increase from 37.66 to 38.15 hryvnias per dollar on the interbank exchange.
Shift in Purchase Prices
Despite purchase prices for fodder wheat remaining steady at $150-154 (€139-142)per metric ton in Black Sea ports, hryvnia prices experienced an increase of UAH 50-100 (€1,22-2,45)per metric ton, reaching UAH 6,300-6,400(€ 154-156) per metric ton. This rise was attributed to limited supply from producers.
Changing Market Dynamics
The market witnessed a surge in offers for food wheat with a protein content of 12.5%, priced at UAH 7,000 (€171,28) per metric ton with delivery to mills. However, stagnant demand for flour prevented price hikes. Exporters displayed minimal interest in wheat with 12.5% protein content, opting instead for lower-quality wheat at competitive prices.
Export Figures and Forecasts
Ukraine’s wheat exports for the 2023/24 fiscal year totaled 9.969 million tons as of February 12, slightly lower than the previous year’s figures. To meet USDA predictions of 15 million tons, monthly exports of 1-1.5 million tons are required, a target deemed feasible due to favorable Ukrainian wheat prices compared to Russian and European counterparts.
Global Market Influences
Worldwide, a decline in wheat prices, exacerbated by reduced demand for Ukrainian food wheat, posed challenges. Market conditions were further impacted by uncertain crop conditions in the USA and Russia, alongside forecasts of wheat sowing areas in the USA.
US Market Insights
In the US, winter wheat conditions in Texas declined slightly, while export rates remained sluggish. Wheat exports for the 2023/24 fiscal year decreased compared to the previous year.
International Futures Market:
March futures for various types of wheat exhibited mixed dynamics across different exchanges, influenced by regional factors and market speculation.
European Market Dynamics
European wheat prices received support from a reduction in forecasted soft wheat sowing areas in France. Despite a decrease in wheat exports from the EU, export forecasts for the current fiscal year were revised upwards.
Russian Market Dynamics
Increased exports from Russia placed pressure on the global market, with rumors circulating about a potential expansion of the grain export quota, indicating active stock selling in anticipation of a robust wheat harvest.
Conclusion
Amidst fluctuating market conditions, the Ukrainian wheat industry remains resilient, navigating challenges posed by global economic shifts and regional dynamics. As the season progresses, stakeholders closely monitor market trends to inform strategic decision-making and optimize export opportunities.
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