Wheat Prices Retreat from Multi-Year Highs Amid Confirmation of Russian Exports Continuation

Wheat prices have retreated from their multi-year highs reached last week after rumors of a halt to Russian Federation exports led to speculative buying. However, it was later confirmed that ships were continuing to call at Russian ports, causing quotes to fall sharply as investors took profits.

The suspension of sea grain exports from Ukraine also contributed to the price increase, but despite this, wheat exports from Ukraine in July reached 961 thousand tons, twice as much as last year's corresponding figure. The export volumes were boosted by deliveries of old harvest grain at the start of the season.

However, constant Russian attacks on ships off the coast of Ukraine have paralyzed logistics and export purchases of wheat, leading to a collapse in domestic prices. Export purchase prices for wheat in Ukraine with delivery to Black Sea ports fell by 1,500-2,000 UAH/t, while there was demand for wheat with delivery to Danube ports at a price of 9,000-9,500 UAH/t or $180-190/t.

The increasing international demand for cheap Ukrainian wheat is forcing traders to look for new logistics routes for delivery through Danube ports or by rail to the port of Constanta in Romania. However, the capabilities of the Danube route are currently limited due to a drop in water level of approximately 1.5 m.