The grain market has shown a mixed picture over the past trading session. On the Matif, wheat closed in the negative while on the CBoT the price took a small step up. Maize was on the rise on both exchanges. Soy almost closed at the highest level in ten years.
The September wheat contract on the Matif closed €3,75 lower at €381,75 per tonne. On the CBoT, the July contract closed 2,7% higher at $10,74.75 per bushel (approximately €379 per tonne). Paris and Chicago are reacting oppositely to the reports from Ankara. Turkey is trying to bring Russia and Ukraine together to reopen Black Sea ports for grain exports. The negotiations on this matter have reached an impasse. Ukraine calls the Russian demands unreasonable. The Kremlin states that Western sanctions are the major problem for grain exports.
International guarantees
The grain stores in the Ukrainian-controlled area are still more than half full. Mykola Gorbachev, director of the Ukraine Grain Association, said this yesterday at a conference of the International Grains Council (IGC), Reuters news agency reports. In total, this concerns approximately 30 million tons of grain still in the silos, out of a total storage capacity of approximately 55 million tons. In the areas occupied by Russia there are another 13 to 15 million tons of grain, according to Gorbachev. He estimates that if the Black Sea ports do not open, Ukraine could export a maximum of 20 million tons of grain in the coming season. The available capacity will mainly be used for the export of sunflower seed at the expense of wheat and corn.
"The harvest starts in a month. We have enough storage for wheat and barley. The problems arise in November when farmers start drying the corn," Gorbachev said. According to him, negotiations in Turkey on grain exports have little chance of success without support from, for example, the US, Great Britain and France. "I don't think there is a company that will load Ukrainian grain if Russia and Turkey sign something. Insurance does not cover those risks. We need international guarantees, only then will grain transport be resumed."
Soy increased significantly
The soy quotation on the CBoT continues to steadily increase. Last trading session, soybean prices rose 6,7% to $17,40 per bushel. Good demand provides a solid floor in the market and the high price of oil has pushed the price up further. China imported 20% more soya in May than in April, according to customs figures published today. This season through May, China has imported 9,67 million tons of soy. Last year around this time the counter stood at 9,61 million tons. This has meant catching up. In the first half of the season, imports lagged behind due to poor weather conditions and low yields in Brazil, the largest soy supplier.