THE WHEAT MARKET’S LEADING THE CHARGE PRICE HIGHEST SINCE NOVEMBER 2012
wheat

THE WHEAT MARKET’S LEADING THE CHARGE PRICE HIGHEST SINCE NOVEMBER 2012

Samarth Mercantile

*Pakistan has decided to allow the transportation of 50,000 ton of wheat from India

*Russian shipments are down 34% this season due to a smaller crop and rising export taxes


The wheat market’s leading the charge. It was hit with weather that is too wet in Australia and a little too dry in the US Plains, shipping issues in southwest Canada and issues around export taxes in Russia. Rising Russian wheat prices stoked concerns about tightening supplies among the world’s top exporters. Wheat prices in Russia rose for a fifth straight week last week on strong demand. Shipments from the world’s largest exporter are down 34% this season due to a smaller crop and rising export taxes.

Concerns about global availability of wheat have also been fuelled by rising prices in Russia, where the government is considering further export restrictions to curb domestic inflation. The US Department of Agriculture (USDA) surprised analysts by reducing its rating of the winter wheat crop. K.C. hard red winter wheat futures also posted across-the-board contract. Chicago Board of Trade March soft red winter wheat was up at $8.38 a bushel (25,218 Kg) on Thursday, after peaking at $8.86, the highest for a most-active contract since November 2012. All futures months hit new contract highs.

While Paris futures notched fresh records. On Paris-based Euronext, March wheat was up at 311 euros ($348) a ton setting a record. Front-month December rose to a record high at 313.50 euros. The euro's drop has heightened concern among traders that brisk European Union exports this season may leave the bloc with very low stocks.

Ukraine’s wheat exports from July 1, the start of the marketing year 2021-22, through Nov. 22 were 21.7% higher on the year at 14 million mt, according to data released by the country’s agricultural ministry Nov. 23. Due to the sharp increase in exports and a promising export campaign anticipated in MY 2021-22, wheat export prices reached a record high of $339.25 ton Nov. 22.

S&P Global Platts assessed FOB Ukraine 11.5% protein wheat at $339.25 a ton Nov. 22. Platts Analytics projected Ukraine to export 22.5 million ton of wheat in MY 2021-22, while the USDA forecast the country’s wheat exports at 24 million ton. Farmers in Ukraine have harvested 32.3 million ton of wheat in 2021-22, according to the agriculture ministry, in 2020-21, it had produced 25.4 million ton.

As a goodwill gesture towards the brotherly Afghan people, the government of Pakistan has decided to allow the transportation of 50,000 ton of wheat and life-saving medicines from India to Afghanistan via the Wagah Border on an exceptional basis for humanitarian purposes,” the Foreign Office said. The FO said the decision of the government of Pakistan was formally conveyed to the Charge d’ Affaires of India at the Ministry of Foreign Affairs.

(Disclaimer: This analysis is only for educational purpose and is not and must not be construed as investment advice. It is analysis based purely on economic theory and empirical evidence. Readers are requested to kindly consider their own view first, before taking any position.) Date: 26-11-2021

Jayant Agro Organics Ltd

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