Milling Wheat Marker rises 1.8% in September on high logistics costs, margin pressures: Platts
The MWM, launched in June to track the most competitive Black Sea export prices, has largely followed Russian 12.5% protein wheat levels.
GLOBAL – The Milling Wheat Marker (MWM) closed September higher, with prices gaining 1.76% to US$231 per metric ton, as exporters grappled with negative margins, high logistics costs, and elevated freight rates, according to S&P Commodity Insights.
According to the report, industry sources expect these pressures to continue supporting prices into the final quarter of the year.
The MWM, launched in June to track the most competitive Black Sea export prices, has largely followed Russian 12.5% protein wheat levels.
September’s monthly average slipped to US$229.27/mt from US$237.75/mt in August due to weaker demand.
As of October 1, Platts, part of S&P Global Commodity Insights, assessed the MWM at US$231/mt for late-October to early-November loadings. “I expect higher prices for November-December loadings,” a Russia-based exporter noted, underscoring persistent market firmness.
Still, Russian exporters face breakeven at US$235/mt, leaving margins under pressure with FOB offers at US$233/mt and bids at US$230/mt. “Most exporters are tired of the losses,” one seller said, citing costly freight and complex rail logistics.
The tight conditions are prompting some exporters to diversify, with lentils offering more attractive margins of US$15–US$20/mt compared to wheat’s US$2–US$3/mt. However, quality-sensitive handling makes lentil exports more challenging.
Demand dynamics remain mixed. Buyers in the UAE and Egypt are cautious about Russian and Ukrainian wheat quality, particularly protein content and low breadmaking quality indices (W values).
Meanwhile, Ukrainian 11.5% wheat was assessed at US$228/mt, supported by trades to Yemen, Syria, and Bangladesh, as well as a 500,000 mt Algerian tender in late September.
Exporters also anticipate potential Saudi Arabian demand, which could add bullish momentum, particularly for Romanian wheat, currently priced at a premium to MWM. In the Constanta-Varna-Burgas market, bids at US$237–US$238/mt reflect tightening farmer sales, with producers holding back in hopes of better returns.
Market participants agree that logistics bottlenecks, quality concerns, and limited farmer selling will continue shaping the wheat market in the near term, keeping prices supported despite sluggish demand.
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