On Thursday, wheat prices traded higher amid the market’s concerns about the intensification of Russia’s Ukraine invasion.
In the early Asian session, the US futures for March delivery increased by 0.05% to $739.90 per metric ton. Likewise, the Chicago Board of Trade (CBOT) contract for mild red winter rose by 6-¾ cents at $7.41-¼ a bushel. Besides, the hard variety was up by 10-½ cents at $8.44-¼ while spring wheat jumped by 5-½ at $9.08-½.
The commodity went higher for a second consecutive session after plummeting to a 15-month low on Monday. This bullish momentum is attributed to short covering, technical buying, and escalations of the Russia-Ukraine war. Market participants worried the invasion could further clog export pipelines from wheat’s two major exporters.
Last week, Moscow’s wheat prices were up amid continued demand from domestic exports. The 12.50% protein content variety, delivered from Black Sea ports, rose by $1.00 to $306.00 per ton.
Meanwhile, the country has been exporting grain quickly this month, delivering 570,000-600,000 tons to Algeria. Besides, it exported 0.80 million tons of wheat in the previous week, up from the previous period’s delivery of 0.67 million tons.
Brazil will export a high amount of wheat in January
Furthermore, the world’s largest wheat producer, Brazil, will export high amounts this month to fill Russia and Ukraine’s shipment gap. Also, a combination of a massive harvest and production woes in Argentina due to drought supported Brazilian exports. In particular, Rio Grande do Sul took most of the impact as Brazil’s biggest-producing region.
Based on shipping schedules, analysts projected the South American nation’s wheat exports to reach 803,800 tons in January. If so, this volume could represent a new historic high compared to the previous record of 695,900 last year.
Besides, Brazilian shipments are expected to hit 3.00 million tons for the 2022/23 season.