Wheat continued to rise on the nightly trading session of the Chicago market in the United States, and its value has already climbed almost 40% since the Russian invasion of Ukraine was triggered.
During the night Chicago, wheat stood at US$ 475.46 in contracts for May with an increase of 7.03% compared to Friday’s close, that is, US$ 31.23; when the price had reached US$ 444.23.
Thus, wheat has accumulated an increase of 38.42% and US$ 131.99 compared to the value with which it operated on the day before Russia’s invasion of Ukraine on February 24 when it stood at US$ 343.47 in the US market.
Fear of shortages generated in the market by Russia’s attack on Ukraine, countries that represent almost 29% of world grain exports; Now the problems that China’s crops are going through are added as an upward factor.
A third of the winter wheat area in China is compromised by excess water as reported by Tang Renjian, Minister of Agriculture and Rural Affairs of China, during the XIII National People’s Assembly of the Communist Party, one of the “two sessions” that take place during March, when the government of that country reports on the status and goals of the national economy.
Versus a winter harvest that could be “the worst in history”, The official indicated that the minimum price for the cereal will be raised, while he estimated that the production of spring wheat, which is being sown these days, will recover from more favorable weather conditions and state technical assistance, according to what was reported. the grain broker from Rosario Granar.
China, the main consumer of wheat in the world, although it produces the grain in large volumes, it is not self-sufficient and it requires imports to be able to supply it, which is now expected to increase in the face of the bad campaign.
In recent days, the Asian country has already eliminated all phytosanitary restrictions on Russian imports in order to supply itself.
According to the United States Department of Agriculture (USDA), China is expected to generate a wheat harvest this year in the order of 136.9 million tons with an import of 9.5 million tons.
While, the war caused the closure of the ports and a stoppage in the production of Ukrainian agriculture, in addition to difficulties in transport with Russia, in the face of the sanctions ordered by the shipping companies.
In addition to wheat, Ukraine and Russia export large volumes of corn, sunflower oil and barley.
According to the USDA, it was estimated that Ukraine would produce 33 million tons of wheat in the 2021/22 campaign, with 24 million dedicated to export, which would have placed the country as the third largest exporter in the world, representing 12% of the market.
For its part, according to data from the Ukrainian Ministry of Agriculture released by the English bank ING, Ukraine had exported 17.96 million tons during the current campaign as of February 23, prior to the invasion.
Meanwhile, in the case of Russia, a production of 75.5 million tons was estimated, with exports of 35 million, ranking as the world’s leading exporter, comprising 17% of global supply.
Although Russian production is not directly affected by the war, sanctions in other areas of the economy could cause, according to ING, a lower demand for its production, as well as for its oil.which, as a consequence, would stimulate smaller plantation areas.
In the case of corn, Ukraine is the fourth largest exporter in the world, while regarding sunflower, it is the leader with Russia occupying the second place.
