Prolonged rainfall will make some of the wheat in Ukraine substandard, so traders are sharply reducing its prices
Prolonged rains damaged Ukraine’s wheat crop, with 20–60% of incoming grain affected by fungi like sooty mold. Much of it is now classified as feed or substandard wheat, leading to higher discounts. Prices for food wheat remain stable, while feed and substandard wheat have dropped amid rising supply.
Prolonged rains in July and early August have worsened the quality of wheat in western and northern Ukraine, as some of the grain was found to be damaged by fungi such as alternaria or sooty mold. Such wheat mostly has no foreign odor and can be used for feed purposes, but elevators and export terminals accept it as not in condition and store it separately from class 4 feed wheat.
The decrease in precipitation in Ukraine has allowed for faster grain harvesting and increased supply from farmers, who primarily offer feed and substandard wheat for sale, so it seems that the share of feed grain will be very large this season.
According to elevators, wheat is currently arriving with a content of “soot” or fungus-infected grains in the range of 20-60%, and some elevators refuse to accept batches with soot above 25%.
The increase in the supply of feed wheat led to an increase in the discount on feed wheat prices relative to food wheat to 800-900 UAH/t, and substandard wheat is additionally discounted by 400-600 UAH from the price of feed wheat.
In Ukraine, export purchase prices for wheat delivered to Black Sea ports remain at the level of 10,700–10,900 UAH/t or 226–230 $/t for food wheat, while prices for grade 4 feed wheat have decreased by 300–400 UAH/t to 9,650–9,800 UAH/t or 203–210 $/t, and for substandard wheat with a slag content of 11–25%, 8,900–9,200 UAH/t are offered.
Dry and warm weather will help complete the wheat harvest next week, which will increase wheat supply and provide insight into grain quality this season.
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Source : Ukr Agro Consult
