Wednesday, August 17, 2022

Ukraine Confirms Ban on Exports of Wheat

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The following article is from Bloomberg BusinessWeek.

by Whitney McFerron

Wheat rose in Chicago on a report that Ukraine confirmed a ban on exports of the grain after dry weather and accelerating demand cut supplies.

Shipments will be barred as of Nov. 15, Reuters reported today, citing Agriculture Minister Mykola Prysyazhnyuk. Exports may reach 5.3 million metric tons next month, a point that threatens to exhaust Ukraine’s exportable surplus, the government said Oct. 19. Drought may cut combined wheat harvests in Ukraine, Russia and Kazakhstan by 37 percent this year, helping send global stockpiles to a four-year low, the U.S. Department of Agriculture estimates.

“The supply-and-demand balance is very tight,” Arnaud Saulais, a broker at Starsupply Commodity Brokers in Nyon, Switzerland, said by telephone. “Long term, we’re still in a situation that should keep prices high.”

Wheat for December delivery added 0.5 percent to $8.735 a bushel at 7:10 a.m. on the Chicago Board of Trade. Prices are up 34 percent this year. In Paris, January-delivery milling wheat rose 0.6 percent to 264 euros ($341) a ton on NYSE Liffe after reaching 264.25 euros, the highest price since Oct. 11.

The USDA estimated Oct. 11 Ukraine’s wheat exports in the 2012-13 season would be the lowest in five years at 4 million tons. Global inventories before next year’s Northern Hemisphere harvest may drop to 173 million tons, 13 percent lower than the previous season, according to the USDA.

Wheat almost doubled in 2010 in Paris trading and climbed 47 percent in Chicago after a drought spurred Russia to halt exports for 10 months and Ukraine to restrict shipments. Russia, whose government has said production this year may be lower than in 2010, may have no need to limit exports in the current season, President Vladimir Putin said Oct. 10.

Ukraine exported 3.8 million tons of wheat since the current season started July 1 and outstanding contracts total 5.4 million tons, the Agriculture Ministry said today. Ukraine has enough milling wheat to meet domestic needs in the season and for reserves, it said.

Soybeans for January delivery gained 0.6 percent to $15.6475 a bushel in Chicago. Corn for December delivery added 0.2 percent to $7.5725 a bushel.

 

Source:  Bloomberg BusinessWeek

Posted by Haylie Shipp

 

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