Rabobank analyst: Buyers may rethink dependence on Black Sea wheat

TUCSON, Ariz. – As wheat prices continued to soar amid Russia’s invasion of Ukraine, a key market analyst said here Tuesday that buyers who have been buying wheat from the Black Sea countries may rethink whether to continue using those countries as a source.

Russia and Ukraine have already moved a lot of wheat into the world market, so for this year “we are pretty good,” Stephen Nicholson of Rabobank said at a session on ingredients at the International Sweetener Users Association meeting here.

But he added that “the crux of the problem” is that “we don’t have enough stocks in the world to make up for the loss of Russia and Ukraine” because they are such big producers.

“Buyers will have to consider, ‘Do you want to do business with the Black Sea region? Will you get your vessel out?” Nicholson said.

Buyers may turn to the United States, Argentina and Europe, he added.

There is already a battle in the United States between corn and soybean acres, and it will be necessary to see what the situation in Russia and Ukraine “does to U.S. wheat acres,” he said.

–The Hagstrom Report