Weather risks are increasing in Ukraine, which have had a negative impact on winter wheat. If there are no significant changes in the weather in the coming weeks, farmers may face serious problems that will affect both production volumes.

This was reported by the analytical department of the First Ukrainian Agricultural Cooperative (FUAC), created within the UAC.

"If there is no heavy rainfall in the next two to three weeks, the situation will become critical. Moisture reserves in the soil are already minimal. Winter crops will last for another week or two, but then the harvest is in question," the FUAC analysts said.

A similar picture is observed in key regions of russia, where moisture deficits are jeopardizing winter crop yields. The weather problems in the US are also being added. In the central states, which form the so-called “wheat belt,” only 5-10 mm of precipitation per week is expected, which is critically low for an active wheat growing season.

"In July-August, products from Ukraine, Europe, Russia and the United States traditionally enter the market. But this season, three out of four exporters already have significant problems with the harvest. The balance on the market is already difficult as global wheat stocks have decreased," the analysts emphasized.

Ukrainian traders are already reacting to the risks - the pace of exports has slowed down.

"As of April 28, wheat exports amounted to about 700,000 tons, although the plan was to ship at least 1 million tons. Some purchases from Turkey and Egypt for May-June will not compensate for the overall decline in market activity," the FUAC said.

At the same time, analysts believe that weather risks could have a positive impact on prices. Nowadays, exporters are keeping prices for both old and new crops, despite low price activity from European buyers. It is expected that in May the price of third-grade wheat may rise to USD240-245 per ton, and even more, given further risks.

"The prediction model for December-February shows the potential for growth of conditional prices up to USD250-260 per ton CPT port. With limited supply and strong demand, the competition for the first batches of wheat of the new harvest may be significant, which will only push the market up. Thus, the spring weather instability may become the main driver of price dynamics on the Ukrainian and global wheat markets in the coming months," summarized the FUAC.