The Competitive Position of the Black Sea Regionin World Wheat Export Markets

Differences in physical quality characteristics among classes or types of wheat are often reflected in global cash wheat prices in general, and in wheat prices and sales involving major Black Sea Region exporters Russia, Ukraine and Kazakhstan in particular. Black Sea Region wheat export markets appear to be somewhat associated with each in other in terms of price dynamics, while still exhibiting important differences. Differences in wheat class quality characteristics and logistical-transportation factors play an important role in determining the competitive, cointegrated nature of world and Black Sea Region wheat market price relationships, along with the dynamics of changing wheat supply-demand balances. Black Sea Region wheat prices display some degree of price interrelatedness for milling quality wheat, but not complete uniformity. Ukraine milling wheat export prices show evidence of being cointegrated with German milling wheat export prices, but less so with with those of Russia. Russian milling wheat export prices appear to be cointegrated with both U.S. hard red winter and soft red winter wheat export prices, but less so with those of the Ukraine. Kazakhstan milling wheat export prices show evidence of being somewhat associated with Russian milling wheat export prices, but not so with those in Ukraine.