On Monday, wheat prices went up after its most significant exporter, Russia, acknowledged concerns about grain shipments.
Wheat futures for September delivery increased by 3.08% to $769.00 per metric ton on June 26’s Asian afternoon session.
The crop’s prices rose amid a political stability problem followed by an aborted mutiny. Experts look forward to Russia being the top global exporter for this season and the following one. Besides, any change in shipments would affect global flows.
According to experts, there is still no immediate pressure on the wheat trade. However, the exporting industry would evaluate the safety operations in the region.
Moreover, a risk premium weighs on wheat after the eventful Russian weekend. The market is too smug about the war in Ukraine and the political stability in Moscow.
The issues could raise concerns over the future of the agreement enabling Ukraine to deliver grains from the Black Sea. Based on the infrastructure minister of Ukraine’s statement, the contract would be renewed in mid-July. But he claimed that he was not feeling positive about the extension.
In addition, cheap wheat from Russia is anticipated to take over the world’s export markets in the following months. This is brought by a significant harvest and big old crop outputs.
On the other hand, the spotlight is on the Russian political risk. Despite there being no coming disruption to come shortly, export prices are likely to increase.
India to Cut Wheat Import Duty
On Friday, a popular broadcaster reported that India may slash wheat import duty if found necessary. It cited the state-run Food Corporation of India (FCI) ‘s head.
In 2023, the grain harvest is expected to drop by around 10.00%, lower than the government’s forecast. According to analysts, it serves as the second year of weak production. As a result, it could negatively affect New Delhi’s attempt to maintain the prices of the commodity.
Based on a note from the government, wheat outputs went up, hitting a record of 112.74 million metric tons. It is higher than the 107.70 million metric tons from last year.
