Abundant rainfall in the regions where winter wheat is grown in the US, dry weather in Canada and Eastern Russia, and the potential closure of the grain corridor have led to speculative increases in wheat prices in the US, rising by 5-6%.

After the extended weekend in the US due to the Independence Day celebrations, wheat markets turned upwards due to excessive rainfall in the regions where winter wheat is grown, which will continue for another week and delay harvests. As of July 2, winter wheat in the US has been harvested on 37% of the total area, compared to 52% last year and the five-year average of 46%.

According to the Crop Explorer report by the USDA, there is a moisture deficit in the southern Canadian prairies as the forecasted rains did not materialize in southern Saskatchewan and southwestern Manitoba.

Representatives from Russia have once again expressed their view on the inadvisability of continuing the operation of the grain corridor, so there should not be an increase in grain exports from Ukraine in July and August.

On this news, September futures for wheat rose as follows:

• Soft red winter (SRW) wheat in Chicago increased by 5% to $247.7/tonne.
• Hard red winter (HRW) wheat in Kansas City rose by 6.2% to $310.9/tonne.
• Hard red spring (HRS) wheat in Minneapolis increased by 6% to $315.1/tonne.
• Black Sea wheat in Chicago rose by 0.3% to $237.25/tonne.
• Wheat on Euronext Paris increased by 2.3% to €233.25/tonne or $252.9/tonne.

In the 2022/23 marketing year, EU countries have increased exports of soft wheat by 12% to 31.1 million tonnes compared to the previous season, but have reduced exports of hard wheat by 24% to 742,000 tonnes. The export of bakery flour has also decreased by 11% to 482,000 tonnes (in grain equivalent).

The main European exporters of soft wheat in the 2022/23 marketing year were France (10.1 million tonnes), Romania (4.7 million tonnes), Germany (3.9 million tonnes), and Poland (3.6 million tonnes). Additionally, Poland became the largest exporter of durum wheat, shipping 185,000 tonnes.

In Ukraine, purchase prices for wheat remain at the level of $160-170/tonne for deliveries to Danube ports, while procurement in Black Sea ports has practically stopped.

At the same time, Russia continues to block Ukrainian exports, increasing its revenue from selling its own wheat. Over 50 million tonnes of Russian wheat have been exported in the 2022/23 marketing year, and it is planned to sell 45 million tonnes in the 2023/24 marketing year. According to SovEcon, prices for Russian wheat with 12.5% protein content rose to $232/tonne FOB. However, the lack of rainfall in the central, Volga, Siberian regions, and especially in Tatarstan significantly worsens the potential of spring wheat harvest.