Prices on the international grain exchanges are minor. In part, this is because the US Department of Agriculture (USDA) Wasde report has yet to come down. In addition, developments in the Black Sea area continue to occupy the market.
The dust is starting to settle again after last Friday's surprising Wasde report (August 12). The report was bullish for corn, fairly neutral for wheat and downright bearish for soy. Trade was counting on a lower harvest forecast for the US. Instead, the USDA reported a contraction in acreage, but expects a top yield. Given the drought in some key growing regions, analysts are questioning whether the USDA is not too optimistic about the soybean crop. The USDA also adjusted the maize harvest in Ukraine upwards, but the market is also struggling to price that in.
The export of grains from the Black Sea region remains a major factor of uncertainty in the market. The counter now stands at sixteen ships that have left Ukrainian ports under the grain deal. According to the Ukrainian Ministry of Agriculture, grain exports this season are 46% behind last year so far. In the 2022/2023 season, 2,65 million tons of grain have been exported so far, the ministry announced today (August 15). The grain deal does not seem to be running very smoothly yet.
grain theft
Ukraine also accuses Russia of grain theft. Various sources also point in this direction. For example, the ship Laodicea is said to have been loaded in the port of Kavkaz, not far from Crimea and a port that is not under the supervision of the grain deal. Research by Reuters shows that this is very unlikely. The maximum draft in the port of Kavkaz is five meters, while the Laodicea, according to the official Russian transport documents, is 8 meters deep.
The Ukrainian embassy has satellite images showing the empty ship entering the port of Feodosia in Crimea and departing with a heavy load. It seems more common that ships in Crimea are loaded with Ukrainian grain. The Financial Times previously found indications that Russia has loaded eight ships with partly illegal grain from Ukraine in Sevastopol and part with legal grain in Kavkaz. In the meantime, the transponders (which are mandatory on ships to pass on the position) are switched off. By loading in different places and occasionally disappearing from the map, it is extremely difficult for potential buyers to make sure that it is not stolen grain.
And that makes it difficult for Russia to sell grain. Last week it was already announced that buyers in Asia are not keen on wheat that Russia offers there for very competitive prices. The club of countries that want to do business with Russia is therefore small. Iran, Egypt and Libya, among others, are less critical of the origin and do not ask difficult questions. The main grain customer for Russia is Syria. Syrian President Bashar al-Assad is a staunch ally of Putin.