Prices on the grain exchanges gave a mixed signal during the past trading session. Paris shows a cautious plus while Chicago is in the minus. Developments in Ukraine remain a dominant factor in price formation.
Prices on the international grain exchanges showed a mixed picture during the last trading session. On the Matif, the September wheat contract gained €3 to close at €339 per tonne. The September wheat contract on the CBoTsloot was 3,2% lower at $7.74,75 per bushel (approximately €279 per tonne). Corn and soy also took a step back in Chicago.
The downward trend in wheat prices on the CBoT is largely attributed by analysts to the resumption of grain exports from Ukraine. On Monday, the first ship that had already been in the port of Odessa since the Russian attack in February departed. That ship arrived in Turkey yesterday evening and will be inspected today before the journey to Lebanon can continue. The grain deal leaves a strong mark on the wheat market, but is certainly not the only reason for the dip on the American stock market. Then Paris should have shown a similar price movement. American wheat exports are partly hampered by the high dollar exchange rate. Wheat from the US is therefore relatively expensive compared to European wheat.
The lower grain price also attracts buyers. According to sources within the European grain trade, Algeria has purchased approximately 660.000 tons of wheat in a tender. Jordan, the Philippines, South Korea, Tunisia and Japan are also currently on the market for wheat. The increasing demand ensures that the wheat price will not fall much further for the time being.
Alternative option for grain export
Despite the grain deal, an important part of the Ukrainian
wheat exported via the EU. One of the frequently used routes runs via the Romanian port of Constanta. The grain is brought from Ukraine by rail or barges on the Danube and is then loaded onto seagoing vessels in Constanta on the Black Sea. Since February, 1,46 million tons of Ukrainian grain have already passed through. The port operator Comvex has invested €4 million in an additional terminal for barges that has been operational for a few weeks. Despite the grain deal, options are being explored in the port of Constanta to further increase the transit of grain. According to the port authorities, an investment of €340 million in machinery is required to process grain from Ukraine in addition to the regular transshipment in the port.
Furthermore, the Romanian Ministry of Agriculture announces that it expects to have wheat available for export this season, the ministry announced today based on provisional yield figures. 96% of the wheat has been harvested in the country. According to the Romanian Farmers' Association, the wheat yield is 25% lower compared to last year. This brings the total production this season to approximately 9 million tons. Last season, Romania accounted for almost 10% of EU wheat production and a quarter of EU exports. Due to persistent drought, maize and sunflowers are also struggling in Romania. More than 200.000 hectares of corn and sunflowers have been damaged, according to the ministry, out of a total of approximately 7 million hectares.