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Black Sea wheat prices have surged in recent weeks due to tight supply and rising domestic demand, but market dynamics and harvest progress hint at a potential shift in the weeks ahead, with initial signs of that already seen.
The Black Sea wheat prices were up by at least $14.50 per tonne in the last two weeks, pushed by the short coverage on the background of increasing domestic prices and slow farmer selling, trade sources told Fastmarkets. But on July 23-24, the increase stopped, and the offers started to drop.
The first signs of the upcoming increase were seen in early July, as the first results from the fields in both Ukraine and Russia were coming, and quality appeared to be questionable.
Ukraine typically has approximately half of its wheat production classified as feed wheat, and feed wheat offers disappeared from the market from July 9, which was one of the first signs of the coming shortcovering.
Fastmarket’s assessment for September shipment feed wheat moved up by $19 per tonne to the current $232 per tonne for September loading by July 24.
But as the market started to drop after July 25, with a lack of offers seen, the price reduced at the same speed as it increased, as on Friday Fastmarkets lowered the feed wheat assessment by $3 per tonne to $229 per tonne. On July 28, offers were already seen at $226 per tonne FOB Pivdenniy-Odesa-Chornomorsk (POC) for September loading.
Traders still expect that there will be more feed wheat available in the market later when harvest progresses into the western regions where harvest has just started, but for now, there are still a lack of offers.
In Ukraine, trade sources also noted that there’s additional high protein wheat being offered from the country now, which is uncommon. Even a few weeks earlier, there was concern that other than high protein, the other quality specifications were bad. But it appears that the quality is good in general.
Still, the prices for milling wheat were also increasing in the past two weeks, along with feed wheat, with 11.5% added $15.50 per tonne to $237.50 per tonne FOB POC by July 24, but same as feed on July 25 the market faced the shift, dropping by $5.50 per tone to $232 per tonne.
On the domestic Ukrainian market, the move was also strong in the last weeks, with bid ideas on CPT basis for 11.5% increased by at least $17 per tonne to the current $230 per tonne bid, but then revised down to $225-227 per tonne on July 25.
Feed wheat on the domestic market moved from bids at $208 per tonne CPT POC on July 9 to the current $225-229 per tonne July 23, but even then there was a lack of fresh bid ideas when the trend changed. It’s expected to be below this level.
In Russia, a similar situation was seen, as even harvest had already progressed to around 28% of the sown areas, including the Ukrainian territories occupied by Russia, with 28.4 million tonnes gathered already. Still, the situation with trade covering from the domestic market remained difficult, with domestic prices for wheat continuing to move up, reflecting the high demand, but also saw a change in the trend on July 25.
The internal Russian 12.5% indicative price has moved up by more than 1,000 rubles ($12.60 according to the official exchange rate), as trade sources are currently reporting prices in the range 17,000 to 17,4000 rubles per tonne CPT Novorossiysk. At the same time national currency has been weakening, making the export trade more competitive even with domestic prices being firm.
Ruble has lost around 3.6% of its value since 16 July to July 25, to the current 81 rubles per $1, the lowest since May 2025.
The same move was seen on FOB basis, where Fastmarket’s assessment for 12.5% protein content wheat moved up by $14 per tonne to $243 per tonne FOB Novorossiysk for September during the two-week period, but then lost $3 per tonne to $240 per tonne assessed July 25.
That comes amid the same reasons as in Ukraine, as harvest has been lagging compared to last year, while some wheat contracts were already booked for July-early August loading. To make that on time, some of the traders have to pay a higher price now to avoid demurrage and further delays.
This is not the first time such a situation has happened, and there were two possible ways in which it can develop – either with further harvest progress and trade covering most of the contracts that were delayed, the demand will settle and the price will drop. This was especially the case, given that the end buyers consider current prices as high, and hold on fresh purchases, and it seems that is exactly what is happening now.
“I think total supply and demand (SnD) is okay and I am not convinced demand will be strong. It will be hard to clear stocks once shorts are out and harvest flow is more robust. If consumers remain patient then sellers can get nervous. I’m not sure there is any reason for the current levels based on the SnD,” a trade source said.
The other potential development is that once the earlier contracts are covered, there might be a need to cover the next portion of those, which might keep giving support. But that scenario seemed unlikely, as most of the buyers are not stepping in for more purchases from the region, and are looking for alternative suppliers, such as Australia, Argentina, other European countries or the US, depending on the destination.
On the background of this, the estimations are for Russian wheat crops to start slowly reducing after the increases seen in the last few months, amid extreme dry weather in the southern regions of the country. Still, there are hopes that once the harvest moves further to the central parts of the country, the situation will improve.
The same is in Ukraine, where Southern regions so far have been showing disappointing results, but once it moves further to the western regions, it’s expected to improve.
However, for both countries, there is an expectation that crop size will drop slightly compared to earlier estimations.
Ukrainian wheat crop is expected to be in the range between 21.2-22.5 million tonnes, which is either in line with last year’s crop or just slightly below, but it’s also anticipated that the forecast can be changed given the progress of the harvest campaign.
In Russia, the wheat crop is currently expected at 82.50-84.50 million tonnes based on local analytical estimations, which usually excludes the occupied Ukrainian territories, while the official ministry forecast is now standing at 88-90 million tonnes, including those. In Russia, the wheat crop is currently expected at 82.50-84.50 million tonnes based on local analytical estimations, which usually excludes the occupied Ukrainian territories, while the official ministry forecast is now standing at 88-90 million tonnes, including those.
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