Is spaghetti in a spin for wholesale pasta suppliers?
Where’s Bruce Willis when you need him? Because the pasta sector could use a hero as it faces a...
3 min read
Follow us
A FOCUS ON THE PERFORMANCE OF THE MAJOR COMMODITY MARKETS AS A TOOL TO HELP US IDENTIFY OUR BUYING STRATEGIES
Wheat price drops on international markets
The absence of clear threats to the Black Sea 'wheat corridor' is favouring the current price declines of wheat on international markets. Despite disappointing supply in the US and the EU, the market is now dominated by abundant Russian exports and a record Australian harvest. At this stage, the strengthening of the euro, which has reduced the competitiveness of European wheat on the international markets and encouraged lower quotes on the EU market, remains crucial.
-
USA: Despite an increase in the area sown to winter wheat in the USA for the 2023/24 crop, the record cold spell that hit the country will have caused major damage. Moreover, low rainfall is expected for the first quarter of 2023.
-
EU: Cumulative European common wheat exports have increased. In contrast, imports from third countries have increased drammatically and already cover 86% of expected volumes.
-
UKRAINE: Ukrainian wheat exports have so far been 46% lower than last year and have slowed down again due to ships blocked. Weather-wise, the warm winter has adversely affected winter crops, putting yield potential at risk.
-
RUSSIA: The competitiveness of Russian wheat on the international market has been strengthened by the recent depreciation of the rouble against the dollar and the euro, which has allowed Russian wheat prices to gain market share.
-
AUSTRALIA: Australia's crop estimate continues to grow. High rainfall has enabled record yields, which will allow Australia to export record volumes of wheat. However, the protein content is low, which will result in a large portion of the harvest being destined for feed.
-
Bullish volatility cues during Q1 of 2023 may come from dwindling stocks in the EU, poor winter wheat conditions in the US, and news on the Russia-Ukraine conflict front.
Good conditions and high yield potential for backup corn could allow wheat prices to fall over the summer, provided conditions are favourable.
To read the full February 2023 Commodities Bulletin register here: