Grain and oil crops market, October, 15-19

Grain crops

Price rise of wheat in the world market and decision about decrease of import duties for grain from Eastern Europe in EU did not cause significant growth of export prices of Ukrainian food wheat. Last week prices of demand dropped, which reflects sufficient supply of food grain crops in the market. The reason of decrease of purchase prices for wheat of class 3 (purchase prices of exporters for wheat of class 4 did not change) is that in the world market difference in prices for soft food wheat of medium quality and forage wheat is rather small. In such circumstances price difference of 19 USD/MT in the domestic market (means prices of supply) for wheat of class 3 and 4 does not look quite natural. By last ten days of October purchase prices have practically reached their minimum. Probably purchase prices of wheat of class 3 will drop down to 450 UAH/MT. It means that level of purchase prices will start to re-establish after several weeks of relatively stable situation.
The cause of high prices in supply of wheat of class 3 is that its owners expect re-establishment of level of domestic prices. From the beginning it was supposed that such re-establishment will occur in November but now expectations most probably will be transferred to the second half of marketing year.
It is possible to suppose that positive dynamics of world prices will ensure possibility of selling of wheat of class 3 in Ukraine at the price of 100 USD/MT, EXW. Yield of maize in the country will not be critically low that is why export will be sufficient to make domestic and export prices be consistent with each other. Most probably contract prices of maize will shift to 90-95 USD/MT in case of due payment.
Market of forage grain was rather passive. Demand for wheat was higher at relatively high volumes of supply. Barley was proposed less often but at the same time interest to buy it was also low. As a result wheat has become a bit expensive and prices of barley were relatively stable. At the same time price difference between barley and wheat is getting smaller.

Oil-bearing crops

Price of sunflower seed continues to go up, tempo of increase being high. Last week price of sunflower-seed oil in the domestic market went up by 30 UAH/MT. Such growth is a consequence of situation in the market of sunflower-seed oil i.e. relatively low volume of domestic supply and increase of export prices. Thus, last week maximum purchase price on condition CPT-port went up to 465 USD/MT.
Taking into consideration the fact that prices of sunflower-seed oil may also go up within next weeks (in supply for selling up to 3,000 UAH/MT) in the market there are still some possibilities of price rise of sunflower seed. At the same time even taking into consideration work for future price rise of sunflower seed most probably will no go up within next week higher than up to 1,250 UAH/MT, CPT. However, here many things may depend upon Russian factor.
Under conditions of dynamic change of situation in the market of sunflower seed and sunflower-seed oil prices of oil cake (both domestic and export) are practically stable.
by information of APK-Inform
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