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Strong demand, downpours and Egypt: how Ukraine opened a new wheat export season?

Export potential of Ukraine in the new season: what is it? Who bought Ukrainian wheat in July?
We would like to draw your attention to an analytical review of the current situation on the wheat export market in Ukraine and the world.
In Ukraine, the harvesting of a new wheat crop is gradually advancing. According to the estimates of the Ministry of Agrarian Policy, wheat in Ukraine has been harvested from more than 30% of the sown area, and the total shaft has already exceeded 9 million tons.
Indeed, harvesting in our country is somewhat delayed due to the abnormally high amount of precipitation throughout June and July. However, with each passing day, the supply of wheat in the physical market is increasing. Despite the advancement of the harvest campaign in the Northern Hemisphere, wheat prices are finding support from fundamental factors.
On the one hand, a record wheat harvest is expected in Ukraine and Romania. On the other hand, estimates of gross harvest in Russia, Canada, and the United States continue to decline rapidly due to unfavorable weather conditions. In the global market, competition between exporters remains high. However, market participants are witnessing the emergence of stable import demand.
In the current trading week, the next Egyptian GASC tender took place, where 120 thousand tons of Ukrainian and 60 thousand tons of Romanian wheat were purchased. At the same time, Russian proposals remain uncompetitive due to export duties and low trading activity on the part of local farmers. The presence of Ukrainian wheat at the Egyptian GASC tender is one of the good indicators of the global competitiveness of our country.

Nevertheless, the overall rate of wheat exports in July should not exceed 1 million tons, which is almost 30% lower than in the previous MY. In fact, the weak export rate in July is primarily due to the delay in the harvest campaign and the physical appearance of the product on the market. At the same time, the gross harvest of wheat in Ukraine may exceed 30 million tons, which, in turn, creates an export potential of 21 million tons. Already in August and September, shipments of this crop should increase significantly, and can reach the level of 4 million tons per month.
In July, Indonesia was the main export destination, and the market was also in demand from Thailand, Tunisia and private Egyptian buyers. As we noted earlier, a significant increase in export rates is expected during August and September. Local trading companies see good import demand from Egypt, Morocco and Indonesia. Moreover, Turkish buyers will become more active in the near future.
Indeed, in 2021/22 MY, Ukraine will need to significantly increase its presence in the global wheat market. Competition in the world market will remain high, however, together with a decrease in estimates of the gross harvest of wheat in Russia (current estimates are 77-81 million tons, against the initial at the level of 85-86 million tons), the total supply in the export market is significantly decreasing. At the same time, unfavorable weather conditions persist in North America, where the gross harvest of wheat in Canada and the United States may significantly decrease. Against this background, many importers are not waiting for the completion of the harvesting campaign in the Northern Hemisphere, and today they are beginning to actively buy wheat with deliveries for September-October and even January-February (Jordan).

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