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Ukrainian 11.5% wheat's discount to Russian 12.5% wheat narrows on tight fundamentals



Consulting Agency


Ukrainian 11.5% protein wheat bids and offers are now effectively pricing at flat to Russian 12.5% protein wheat amid high demand for Ukrainian material and slow buying for Russian volumes.

Ukrainian 11.5% wheat was bid at $222/mt and offered at $225/mt Wednesday for positions loading in H2 December, steady on the day.

Russian 12.5% wheat was bid at $223/mt, falling 50 cents on the day, and offered at $226/mt, up $1 on the day, Wednesday for positions loading in H2 December.

Driving the small difference in prices is high demand from Southeast Asian countries for Ukraine's 11.5% wheat.

Many buyers, particularly from Southeast Asia, are opting for Ukraine-origin wheat on easier access due to a fewer phytosanitary export restrictions.

Concurrently, supply of Ukrainian 11.5% is running much thinner, which adding further upside.

On the other hand, very few buyers are in the market for 12.5% protein wheat, which has seen plenty of length build up on the very prompt.

"Long holders [of 12.5% Russian wheat] are dumping on the very prompt," a source said, adding that there are expectations of this trend to continue for at least another month.

However, with more buying set to take place in the new year as destination markets like Turkey pick up their buying, pressure should dissipate on the 12.5% Russian protein wheat market.


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