Drastic rise in wheat prices on the Black Sea markets in Bulgaria

Published Aug 5, 2021

Tridge summary

The international grain markets have experienced significant volatility due to speculative activities in Chicago and Paris stock exchanges, driven by climatic factors and revised production forecasts. Initially, prices were trending downward due to expected increased yields and optimistic production forecasts from key producer countries. However, this trend was interrupted by unexpected developments, including disappointing harvest forecasts in the United States, failure of hoped-for warmer and drier weather in Europe, and significant reductions in wheat production and export estimates from Russia. These factors, coupled with continued demand from large buyers, have led to a sharp increase in wheat prices, reaching a high of $260-265/t for 12.5% protein grain in the Black Sea region.

Disclaimer:The above summary was generated by Tridge's proprietary AI model for informational purposes.

Original content

The development of international grain markets for the short period since the beginning of the new 2021/22 marketing year (from July 1 for wheat) was characterized by dramatic changes and very high price volatility, due primarily to increased speculative activity on the stock exchanges in Chicago and Paris and provoked by the climatic factor. Until 12 July, the main cereals followed a downward price trend, influenced by the expected increase in bread and feed grain yields globally in the main producer countries. For wheat in early July, the downward vector intensified given expectations of increased supply from the Black Sea region and, above all, from Russia and Ukraine. In early July, the forecast for wheat production there seemed very optimistic. The bar for Russia, for example, was raised to 84-86 million tons, which meant climbing to a new historic peak. In early July, the Food and Agriculture Organization of the United Nations recently noted that in June 2021, the first ...

Source: Sinor