The harvest has begun. The first batches of wheat are already arriving at the granaries, and although there is not much optimism yet, the situation is most likely to improve in a few weeks. But the main question now is: what will happen to prices? When is it profitable to sell grain? And is it worth rushing to sell at all?
Harvest time — traders are waiting
Despite a dry spring, the weather in many regions has given a chance for quality wheat. This is stated by Bohdan Kostetskyi, Commercial Director of Barva Invest company. According to him, farmers who did not skimp on fertilizers have a chance to get a good return — provided they manage the harvest wisely.
Demand for wheat is currently not very high. According to Barva Invest analysts, Ukraine expects 20-21 million tons of wheat this season, of which up to 15 million tons will be exported. However, traders are in no hurry — the first large contracts for foreign markets will start no earlier than the second half of July.
NB: Meanwhile, active trading is already underway for barley and rapeseed. Barley with a certificate for China is currently going for $200 per ton with delivery to the port. Rapeseed is even more interesting: from $520 to $530 per ton for 42% oil content, with bonuses for higher quality.
Why the delay with wheat?
The reasons are not only market-related. Russia, as every year, enters the market with a large volume of new harvest precisely at the time of the harvest. Its presence this season will also create downward price pressure. Even if the harvest in the Southern Federal District is slightly smaller, prices will still remain low.
NB: According to Kostetskyi, August may bring a further decrease of $5-10 per ton. But a reversal is expected from September: traditional buyers from North Africa, the Middle East, as well as Asia — Indonesia, Vietnam, the Philippines — will become more active. These countries mainly purchase wheat with a protein content of at least 10.5%.
By the way, the quality of this year’s grain is holding up quite well so far. If previously only 30% of food-grade wheat was expected, now, according to initial estimates by grain traders, we have 40%. Another 55-60% is wheat of the 4th class.
Prices with delivery to a deep-water port are currently as follows:
- $200 per ton for 4th class,
- $210-211 — for 3rd class,
- $212 — for 2nd class.
Sell now or wait?
This question concerns most farmers. And the answer is not so straightforward.
NB: Experts advise to calculate first: which crop is the most profitable in the farm right now. If there is rapeseed or barley, it is better to focus on them and leave the wheat alone for now. If there are no alternatives, it is worth selling only as much as is needed to cover initial expenses. Keep the main volume until autumn.
The “PUSK” cooperative also predicts price growth: as early as October-November, specialists say, the price for 3rd class wheat may reach $230-240 per ton (CPT port). And in December-February, the peak is possible — $260-270. But no one gives guarantees: price is a variable thing, and the farmer must keep their finger on the pulse.
The season has started difficultly. But this does not mean it is unpromising. As practice has shown in recent years, it is not those who act quickly who win, but those who think strategically. Wheat this year is not the main “star” in the market, but it will still have its moment. And those who are ready to wait and calculate their steps correctly will be able to come out ahead.