Wheat prices move lower as sellers offload volumes in the volatile market

November 11, 2022

2 mins read

The Mintec Benchmark Prices [MBP] for Wheat Milling 11% DDP Rouen FR was assessed at €326.00/mt, down 4% week-on-week (w-o-w). The global wheat market remains volatile as it awaits news on the grain corridor deal’s future. Additionally, adverse weather in the Southern Hemisphere is creating production concerns.

Last week, Russia withdrew from the grain corridor deal for 3 days but then re-joined after receiving written security guarantees from Ukraine that it would not use the Black Sea grain corridor for military purposes. On 7th November, Turkey proposed the extension of the grain corridor deal for one more year, as the current deal expires on 19th November. According to Mintec sources, “There’s still a lot of uncertainty regarding the renewal of the deal. Thus, the uncertainty makes estimating the supply and demand balance for wheat increasingly tricky”. Consequently, wheat prices will continue to have significant price impacts due to the ongoing grain corridor deal’s uncertainty.

Meanwhile, adverse weather in Argentina continues to impact wheat crops and support prices. According to the Rosario Grain Exchange, Argentinian wheat production is estimated now at 11.8 million tonnes, down 14% from the previous estimate (15.5 million metric tonnes, according to the USDA). A Mintec source said, “I think there will be further reductions due to prolonged drought”. If realised, this would be the smallest crop in seven years, further tightening the global wheat outlook. As of 6th November, the US winter wheat planting was 92% complete, up 2% y-o-y. Winter wheat conditions improved due to rain in early November, especially in the Central and Southern Plains. In the latest USDA crop progress report, winter wheat was rated in a 30% good-to-excellent condition, down 15% on this time last year. According to Mintec sources, “Low water levels in the Mississippi River remain a concern and are not expected to rise anytime soon. It’s harvest time, and farmers are forced to seek [transportation] alternatives, for example, via West Coast ports or via rail, and these are all expensive”.

Topics: Grains & Feed
Zanna Aleksahhina
Zanna Aleksahhina

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