Wheat prices rose again yesterday. Uncertainty about grain exports from Ukraine continues to grip the market. Last week, the signals appeared to be green for exports to resume. That optimism has disappeared just as quickly as it arose.
The wheat quotation on the Matif took a big step up yesterday. The September contract closed at €397,50 per tonne. That is an increase of 5% compared to the closing price before the weekend. This brings the psychological limit of €400 very close again. The other contracts for the 2022 harvest also made a significant upward movement, some even rising by almost €19 compared to Friday. The picture was no different at the CBoT. The July contract also rose 5,1% to $10.93 per bushel (approximately €376 per tonne).
Disruptions in grain exports from the Black Sea region continue to be a major factor on the grain market. Russia announced last week that it would cooperate in reopening the Ukrainian ports on the Black Sea. However, there are more and more ifs and buts. It soon became clear that Russia wants relief from Western sanctions in return, for example.
One of the latest ideas to get around the blockade of the Black Sea ports is to transport grain by rail through Belarus to the Baltic Sea. That proposal cannot count on support from Ukrainian President Zelensky, he said yesterday. According to the president, 75 million tons may remain in Ukraine this fall that cannot be exported due to all the restrictions. Figures published today by the Ukrainian Ministry of Agriculture show that exports of grains, oilseeds and vegetable oil increased by 80% in May compared to April. Compared to the same month a year earlier, exports are still lagging behind considerably. In May 2022, corn exports amounted to 959.000 tons. That was still 2021 million tons in May 2.245.
Catching up on backlog
The US corn sowing deficit compared to the five-year average has turned into a lead. 94% of corn is in, compared to the 92% five-year average for this time of year, according to the USDA's Crop Progress report. The condition of the crop is also good. 73% receive the status good or excellent and 4% poor or very poor. In the five-year average that is 72% to 5%. Spring wheat remains a concern in the US. Of the originally planned area, 82% is in the ground. The five-year average is 97%. The growth of spring wheat is getting off to a slow start. Of the sown area, 55% is above ground versus 83% in the past five years. Winter wheat conditions remain poor in many parts of the US. And growth in winter wheat is also somewhat behind the five-year average. There is 79% of the wheat in the ear and that figure is 84% for previous years.