According to USDA, in the 2022/23 marketing year, global wheat production is forecast to decline for the first time in four years, down 0.7% year-on-year (y-o-y) to 773.4m tonnes, primarily reflecting lower expected outputs in Ukraine, Australia, Argentina, India, and Europe.
Ukrainian wheat production is estimated to fall the most by 35% y-o-y to 21.5m tonnes due to Russia's invasion in late February 2022, which lowered access to fuel, seed and fertilisers and reduced productivity. At the time of writing, weather conditions in Ukraine remain stable. However, the ongoing war continues to bring significant uncertainties for wheat crop cultivation and harvest, especially in the south and east regions. Ukrainian wheat exports are projected to be at 10m tonnes, 47.4% lower than the previous year due to war-related port closures. Before the war, Ukraine exported approximately 98% of its grains (wheat, maize, barley) and oilseeds via the Black Sea, up to 6 million tonnes per month. Currently, with the ports being blocked, the railway system is capable of transporting relatively small volumes, approximately 1-1.5 million tonnes of grains a month.
Wheat prices surged across all origins from late February until May 2022, except Ukrainian wheat. Ukrainian wheat price fell to EUR 200.65/MT (UAH 6,180/MT) in June 2022, down 5% month-on-month and 22% quarter-on-quarter.