The grain market showed a mixed picture over the past trading session. Wheat was under some pressure while maize and soy maintained the upward trend. In the wheat market, it is mainly the developments in international trade that dominate the market. The corn and soy markets are both a real weather market at the moment.
The September wheat contract on the Matif took a small step back and closed at €340 per tonne. That is € 4,50 lower compared to a day earlier. On the CBoT, the wheat price fell 1,7% to $7.90,25 per bushel (about $285 per tonne). Soy was up 3,3% in the last trading session. Corn was also on the rise, albeit more moderately than soy. The corn quotation on the CboT was up 1% and closed at $6.01,75 per bushel (about €232 per tonne). Weather models predicting warmer, dry weather in the Midwest for early August are boosting corn and soybean prices.
Turkish Defense Minister Hulusi Akar presented yesterday (Wednesday, July 27) a coordination center in Ankara to oversee grain exports from Ukraine. Last Friday, Ukraine and Russia, led by Turkey and the UN, signed the much-discussed grain deal. The coordination center in Istanbul arranges grain transport to and from the ports in Ukraine. Among other things, there will be a check that the ships en route to Ukraine are not carrying weapons. It also provides information about the route ships should take to avoid the mines in the area.
Trust
Confidence in the grain deal was damaged almost immediately by Russian missile attacks on first Odessa and later Mykolaiv. However, the UN, Ukraine and Russia have all expressed the expectation that grain exports could resume within days. Russian State Secretary Andrei Rudenko warned yesterday that the deal could quickly be scrapped if all restrictions on the export of Russian agricultural products are not lifted immediately, the Russian news agency Interfax reported.
For now, it appears that the grain deal is being used to move the dozens of ships that have been moored in the Black Sea ports since the outbreak of the war. These ships have not been able to go anywhere for five months now and are now being loaded as quickly as possible if this has not yet happened. Safe routes are also being mapped out that do not require the removal of mines.
Striking decision
Egypt has canceled contracts for a total of 240.000 tons of wheat that had been signed before the Russian attack. Reuters announced this yesterday on the basis of two sources. In May, the news agency reported that 300.000 tons of wheat purchased by Egypt's state purchasing agency GASC has stranded in Ukraine. The trading companies no longer have to fulfill their obligations to GASC. It would concern four ships that are still unloaded and one ship that was already loaded. In the international grain trade, a force majeure clause (also called force majeur) is often included in the contracts. Parties can then, for example, in the event of a war break out from the contract. GASC has not included a force majeure clause in these contracts. Some analysts therefore call it remarkable that GASC is still terminating these contracts. The wheat was purchased in December for prices between $346 and $360 per tonne including transportation. By comparison, in April around the peak of the market, GASC paid up to $494,25 per tonne for wheat.