Black Sea exports put grain prices under pressure

Quotations on the international grain market were slightly under pressure in the last trading session. On the Matif, the September wheat contract fell to €336 per tonne, down €7 from the previous close. On the CBoT, the wheat contract lost 1% to close at $8.00,52 per bushel (approximately €287 per tonne). Corn and soy also took a step back, falling 1,8% and 2,9% respectively.

The downward trend on the stock markets was partly caused by the departure of a grain ship from the port of Odessa on Monday morning. That was the first transport that took place in the context of the grain deal that was concluded two weeks ago. Several experts warn not to celebrate too early. Current exporters are focusing on ships that have been stuck in Ukrainian ports since the Russian attack. Of the dozens of ships that have been stranded, the first has now left. Empty ships cannot yet sail to Ukraine to pick up a shipment of grain, a source from the shipping insurance world told Reuters. Important agreements such as the procedure for empty ships still have to be worked out, according to this source.

Turkey, which took a leading role in negotiating the grain deal, expects about one ship per day to leave Ukrainian ports as long as the grain deal holds, an official told Reuters today. The departure of the first ship Razonni was delayed for several days yesterday due to technical problems that have now been resolved. The ship will arrive in Turkey early Wednesday morning and will then undergo an inspection by Russian, Ukrainian, Turkish and UN authorities. The ship may then continue its journey. Turkey expects the safe corridors to function well.  

Status of the crop
The downward momentum in the grain market has been reinforced by the USDA's Crop Progress report. Analysts assumed that the condition of corn and soy in the US would suffer from the heat and drought. Therefore, a write-down of the crops was expected. However, the USDA made no adjustments to the condition of corn and maintains 61% of the acreage at good or excellent. That is comparable to last week. Growing conditions for soy have even improved, according to the USDA. 60% of the soy area was in good or excellent condition. In the previous edition of the report this was 59%.

In spring wheat, 70% of the area is given the status of good or excellent. That is an increase of 2% compared to a week earlier. It remains to be seen whether this will also result in a good yield. Last week's trials show a yield in North Dakota that is well above the five-year average. Some analysts doubt whether the revenue forecasts are too positive. Due to a relatively wet spring, the sowing of spring wheat only started late. A crop sown late usually does not produce top yields. Favorable growing conditions have largely compensated for this effect. It remains to be seen to what extent the favorable growing season has compensated for the late start.