Grain quotes on the international stock exchanges closed in the plus during the past trading session. The weather forecasts play a part in this. But the developments surrounding the Black Sea are also important. Ship traffic from Ukraine is slowly picking up as Russia struggles to find buyers for wheat.
The wheat quote on the Matif took another step up in the past trading session. The September contract closed €5,25 higher at €342,25 per tonne. On the CBoT, the wheat price rose 2,4%. The September contract closed at $7.81,75 per bushel (€281 per tonne). Corn and soy also closed in the plus in Chicago at 1,9% and 3,6% respectively.
Shortage in wheat supply continues to leave its mark on the market. The export from Ukraine is gradually being resumed, but that still does not provide enough air on the market. Today the departure of three loaded ships with a total of approximately 58.000 tons of grain on board is planned. Perhaps even bigger news about the grain deal is that an empty Turkish bulk carrier is on its way to Ukraine to pick up a load of grain. A spokesman for the local government of the Odessa region announced that the ship is expected to arrive in the port of Chernomorsk today.
Preferably no business with Russia
Russia is experiencing problems with grain exports in a different way. Logistics is not the biggest bottleneck for the Russians, but finding buyers is difficult. According to several grain traders based in Singapore, Asian mills are very reluctant to make commitments for Russian wheat, Reuters news agency reported. In order to attract customers for wheat, Russia offers this wheat at very competitive prices. According to Reuters sources, prices range from $405 to $410 per tonne of delivered freight (C&F) delivered in Southeast Asia. By comparison, Egypt paid for wheat in a tender a few weeks ago around $405 per tonne delivered to the ship (FOB), so with transportation costs for the buyer. Although the price of Russian wheat is attractive, few Asian buyers dare to try it. Buyers don't want to take any chances with Russian goods that might cause problems. The US has already issued a statement intended for banks, shipowners and insurers stating that food and fertilizers are not subject to sanctions. The Asian mills do not seem to trust this completely for the time being.
Russia is heading for a good wheat harvest. Market bureau Sovecon yesterday estimated the total Russian wheat harvest at 90,9 million tons. In the previous forecast, this was still 89,2 million tons. The Russian Ministry of Agriculture lowered expectations a bit today. Previously, the ministry counted on a total grain harvest of 130 million tons. Due to weather conditions and a lack of parts for western machines, this has to be adjusted downwards. The Ministry of Agriculture had set an export target of a total of 50 million tons of grain. That target will have to be revised if the total expected grain yield ultimately turns out to be lower.
The soybean quotation on the CBoT was boosted to a large extent by the weather forecasts for the US. Previously, the showers predicted by the models put pressure on prices. Now that it is clear that these showers have passed through large growing areas, the market is once again under the spell of heat and drought.