Wheat: Low prices devalue the higher quality characteristics of wheat

September 15, 2017 at 11:37 AM , Starry Night Ltd.
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SOFIA. The enthusiasm for higher prices this season quickly evaporated on the background of a record regional supply. Will withholding the crop change the recent downward slide of prices?

SOFIA. Occasional weekly spikes fail to pull out current prices from the prevailing bearish trend, which has embraced the market for some time. Since the beginning of the marketing season, prices of milling and feed wheats have been sliding down. Meanwhile, exported volumes have reached all-times high - 1.5 mmt by the end of last week.

Wheat: low prices are the thorn in the eye of sellers

The real challenge now is no longer short-term prices; it is medium-term ones. This season, supply of wheat in the Black sea region has already reached a record level. The big regional producer and exporters dictate prices, which in turn influence local ones. According to farmers, the higher quality crop and the higher output this season could not be taken full advantage of so far in the marketing season because of competitive prices in the region.

Nevertheless, competitive prices have pushed exports to all-times high. Exports have continued to grow on a weekly basis since the beginning of the marketing season. Only via Varna sea port, by the 10th of September 2017, 879,143 mt were exported, which is close to 30% higher than exported volumes via the same marine route last year.

Selling market players face the worst scenario: higher quality wheat on the background of higher output clutched in low prices. There is only one way out: withhold mass sales in order to test the pulse of the market. As a result, the high turnover export rate could slow down by the end of the month.

Wheat, Bulgaria

Type

EUR/kg

milling wheat

0.141

feed wheat

0.134

EXW Bulgaria

 

 

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