Although wheat prices continue to be sensationalized by the media, global stock/use ratios suggest there might be only a temporary downside to wheat prices and the Teucrium Wheat Fund (WEAT). However, it would be too early to reiterate long positions in the WEAT exchange-traded fund, ETF, as a bad headline in the geopolitical escalations can cause further wild volatility going forward.

Front month wheat futures somewhat eased in the midweek session, taking back the premium built on Wednesday, November 16, regarding the uncertainty of the Poland missile. At the close, SRW futures were 10 3/4 to 11 1/2 cents lower. KC futures gave back 7½ to 9½ cents for the day. The United States Department of Agriculture, USDA, recently reported a large private wheat sale as such classic importers as Iraq booked 150k metric tons (MT) of HRS wheat for 2022/23 delivery. Corresponding estimates for wheat export sales have been upgraded to 250k MT and 500k MT for the week that ended November 11. Also, Egypt reportedly booked 300k MT of wheat from Russia without issuing a tender.

Meanwhile, according to Bloomberg, Russia’s grain-export pace is accelerating, just as Ukraine shipments are hit by uncertainty over whether the landmark Black Sea deal will be extended anytime soon. Strong demand and competitive prices are spurring Russian shipments after a slow start to the season. The country has exported 6.53 million tons of grain and other agricultural products by sea since Oct. 1, compared with 4.59 million tons over the same period last year, according to ship lineups from Logistic OS.

Back to the situation with grains, UK’s Agriculture and Horticulture Development Board foresees 1.803 million HA as forecast for 2023/24 wheat target. That would be down 0.1% from the current crop season as they foresee fertilizer price pressure. Speaking about the latter, the four major components, MAP, potash, urea are all generally higher while reaching new multiyear records. Most recently, MAP had an average price of $980/ton, potash $853/ton, urea $812/ton and 10-34-0 $758/ton. DAP had an average price of $931/ton, anhydrous $1,434/ton, UAN28 $582/ton and UAN32 $680/ton.

Remarkably, a study by the WTO and the UN Food and Agriculture Organization (FAO) called for improved access to fertilizer across the world to avert a looming food crisis. The study outlines policy recommendations for G20 governments, highlighting the importance of keeping the fertilizer market open to meet global demand.