Global wheat prices fell on Tuesday as signs of progress in peace talks between Russia and Ukraine weighed and some buyers withheld advancing their purchases.
Signs of progress after peace talks held in Istanbul on Tuesday between Russia and Ukraine weighed on global cash and futures wheat markets. Some futures markets even reached technical limits earlier in the trading day. The Russia-Ukraine conflict significantly tightened the wheat supply-demand balance in recent weeks, and the potential of progress in peace talks raise the prospect of increased supply from the region. That said, even in the event of a peace agreement being reached, the return to normal operations of Ukraine's logistical chains could take some time, Argus' agriculture analytics arm Agritel said.
Sellers of Russian 12.5pc milling wheat lowered their offers to around $400/t fob, $7/t below offer levels heard on Monday. And exporters from Argentina offered the Argentinian 11.5pc wheat grade at at $370/t fob upriver on a spot basis, which was $2-3/t lower than the offer range on Monday. Few firm bids were heard to match these offer levels, resulting in limited liquidity on the cash markets.
Improving crop conditions in Kansas may have also contributed to the weakness in the wheat market on Tuesday, although conditions in other states were mixed.
While some buyers opted to delay securing volumes in anticipation for further price drops, fresh demand still came from north Africa on Tuesday as Algeria and Tunisia tendered for 50,000t and 150,000t of milling wheat respectively.
Canada
Canadian Western Red Spring (CWRS) wheat prices moved down on Tuesday, as rising premiums were not enough to offset a sharp drop in Minneapolis Grain Exchange (MGEX) futures.
The 13.5pc protein grade wheat settled at $431.75/t fob Vancouver on Tuesday's close, $8/t lower than Monday. Premiums rose by just ¢5/bu to ¢130/bu over the MGEX May contract, which was nowhere close to offsetting a Minneapolis-listed futures drop of ¢34/bu at the time of writing.
CWRS has seen enquiries from buyers in east Africa, Japan, South Korea and southeast Asian countries this week, but continued to lack firm purchasing commitments, market participants said.
Some 154,600t of Canadian wheat was shipped in the week to 20 March, bringing the total since the start of the 2021-22 marketing year to 7.5mn t. Agriculture and Agri-Food Canada (AAFC) expects full 2021-22 marketing year exports to hit 15.55mn t, so the country would need to ship 423,000 t/week to hit this target. This is more than double March's average of 202,666 t/week.
