The wheat market continues to face pressure due to uncertainty surrounding the future of the grain agreement. However, at the end of the week, prices sharply increased following a downward revision of wheat production forecasts in the EU, which dropped to last year’s levels.

On Sunday, the last grain-carrying vessel departed as part of the grain agreement from a Black Sea port. The chances of extending the agreement are minimal, although Erdogan claimed to have agreed with Putin on its extension, a statement later denied by the Russian side.

Yuriy Vaskov, Deputy Minister of Infrastructure of Ukraine, stated that the country would not agree to extend the grain agreement under current conditions, but would only consider a 120-day extension, as it is not efficient for farmers and exporters. If the agreement is not extended for 240 days, Ukraine will explore alternative scenarios, including continuing to work with Turkey and the UN without Russian involvement.

According to the State Customs Committee (SKT), 11 grain vessels were inspected in July, with an average inspection rate of 1.3 vessels per day, compared to 10-11 vessels per day in September-October 2022.

French agency Strategie Grains lowered its forecast for EU soft wheat production in 2023/24 MY by 2.5 million tons to 126.2 million tons, which is 11.8 million tons below the July USDA forecast and only 1% higher than the 2022/23 MY figure.

Precipitation is delaying the harvest of winter wheat in the United States, and yield data varies significantly depending on regions and the amount of rainfall in June.

Over the week, U.S. wheat export sales decreased by 2.5% to 395.7 thousand tons, totaling 5 million tons for the season, which is in line with last year’s pace.

September futures increased on Friday, compensating for the decline caused by the July USDA report:

• Soft red winter (SRW) wheat in Chicago rose by 3.4% to $243.1/ton.
• Hard red winter (HRW) wheat in Kansas City rose by 2.8% to $304.6/ton.
• Hard red spring (HRS) wheat in Minneapolis rose by 2.6% to $324.9/ton.
• Black Sea wheat in Chicago rose by 0.1% to $233.5/ton.
• Wheat on the Euronext exchange in Paris rose by 1.3% to €233.25/ton or $260.2/ton.

In Ukraine, as of July 14th, 714.6 thousand tons of winter wheat have been harvested from 211.8 thousand hectares, with a yield of 3.37 tons per hectare. In comparison, by the same date last year, 1.7 million tons of wheat were harvested from 588.3 thousand hectares, with a yield of 2.88 tons per hectare (4.11 tons per hectare in 2021).

In the eastern regions of Russia, the harvest of spring wheat began 2-3 weeks earlier than usual due to drought conditions during the maturation period.