Black Sea Wheat Prices Surge Amid Tight Supply and Strong Demand

The Black Sea wheat market has continued to experience a rise in prices, attributed to "tight supply" despite a well-underway harvest. Analysts from Argus AgriMarkets and Platts S&P Global have reported slow farmer selling of new crop as the harvest has been slow, with many farmers holding out for higher prices. This has resulted in Black Sea milling wheat prices being $US10 to $US15 a tonne above the lows of June. Meanwhile, the US corn belt is experiencing dry weather, leading to a rise in Chicago Board of Trade wheat futures.

Key Takeaways:

• Black Sea milling wheat prices have risen by $US10 to $US15 a tonne compared to June lows, with prices in 2023 equating to lifts of about $15/t to $23/t in milling quality Black Sea wheats over the past month.
• The slow pace of ship loadings at Russian ports is four times slower than the same time last year, highlighting the tight supply situation.
• US corn crop development still has a way to go, with the US Department of Agriculture projecting record yields to help keep tight global stocks in balance.
• Rising Russian prices can provide opportunities for Australian exporters to meet grower price expectations and fill the gap in supply, but these opportunities are momentary.
• Growers can help meet export demand by offering grain for sale at their sell price on an independent exchange, creating demand and more pricing opportunities for growers.
• Last week, 104 buyers made 4515 searches for grain stored in warehouse and on-farm that was offered for sale on Clear Grain Exchange.

Statistics:

• $US10 to $US15 a tonne increase in Black Sea milling wheat prices compared to June lows.
• 4515 searches made by buyers for grain stored in warehouse and on-farm on Clear Grain Exchange last week.
• 104 buyers made searches for grain on Clear Grain Exchange last week.

Sources:

• Argus AgriMarkets
• Platts S&P Global
• US Department of Agriculture
• Clear Grain Exchange