Wheat is rising in price again on world markets

The World of NAN editorial analyst presents a short overview of the world agricultural product markets for May 13–24.

Worldwide wheat prices have risen over the past two weeks to July 2023 highs. The price of soft wheat in Chicago increased by 8%, reaching $256 per ton. Hard Red Winter rose in price by 3.4%, reaching $265. The International Grains Council has cut its forecast for global wheat consumption by 2 million tons and production by 3 million tons in 2024-25. In Russia, the forecast for wheat harvest by ICAR was reduced for the third time in May. At the beginning of May, the forecast was 93 million tons, which on May 13 was lowered to 86 million tons, and on May 21 the forecast was reduced to 83.5 million tons.

Prices for export Russian wheat in the Black Sea ports increased slightly. The price index increased by 0.1% and remained at $235 per ton. The current duty on wheat exports from Russia over these two weeks has decreased by 9.2% and amounts to 2,977 rubles per ton. According to data from the Kazakhstan Commodity Exchange ETS, the last wheat transaction took place only on May 14. Then soft wheat Triticum Aestivum 3rd class with gluten 27% was sold for ₸140 thousand per ton. The same wheat, as of May 24, is sold at a price of ₸142 thousand per ton. But on May 23, several transactions took place in sugar at a price of ₸375–380 thousand per ton. In total, 611 tons of sugar were sold that day. In general, for sugar, you can notice an almost 20% drop in price over the previous 2 weeks.

In London, sugar prices fell a further 4% over the two weeks, reaching $546 per ton, the lowest since January 2023. Sugar production in Brazil continues to grow. According to the latest data for the first half of April, production increased by 84% y/y, and in general for March-April the annual growth was 65.9%. In addition, traders’ “short” positions are growing. According to the latest data, funds increased their net short position in sugar futures to a 4-year high, expecting a decline in the price.

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