The mood on the Matif is somewhat reserved while on the CBoT prices have moved up. Cold in the US and drought in Argentina are cited by analysts as the main drivers. Possible problems with shipping in the Black Sea seem to be passing by for the European grain market for the time being.
The wheat quotation on the Matif closed yesterday with €0,75 marginally lower at €314,50 per tonne. On the CboT, there was more movement in the March wheat contract, which rose 1,4% to $7.85½ per bushel. Soy increased 1,6% last trading session to $15.06½ per bushel. Corn was also on the rise, closing 1,2% higher compared to the previous close.
The extreme cold in the US continues to worry the wheat market. The extent of the damage cannot yet be determined, but it seems certain that part of the wheat has overwintered. According to several experts, the fact that the wheat quotation is not going any further is due to the ample supply of relatively cheap wheat from Russia. A fall in the ruble rate has made Russian wheat even more attractive to foreign buyers. Then ships must be able to sail in Russian waters. And there threatens to be a hitch.
Insurance
Ships sailing in Russia, Belarus or Ukraine may no longer be insured against the possible consequences of war, Reuters news agency reports. Reinsurers (reinsurers who insure certain risks of insurers) often renew the conditions for their customers every year on January 1 and now have the first opportunity to make adjustments since the Russian invasion. Shipowners usually have a mutual insurance company through some kind of mutual insurance company protection & indemnityinsurance (P&I), which covers third party liability claims including environmental damage and injury and separate hull and machinery policies that cover vessels against physical damage. The possible loss of coverage for ships in Russian and Ukrainian territorial waters will make it more difficult for charters to find an insurer, premiums will rise and some of the ships may sail uninsured, Reuters sources warn. Previously, the message circulated that there would be a separate clause in the policies that excludes war-related damage to ships and aircraft in Russia, Belarus and Ukraine.
Corn, but especially soy, prices continue to receive significant support from the drought in Argentina. It is dry in important growing regions and this does not seem to change in the coming days. The time window in which soy can be sown is rapidly approaching. It is already very late in the Argentinian season and after mid-January there are not many opportunities to sow soy. Exports of the 2021/22 soy crop in Argentina are slightly behind last season. This season 78,9% has been completed and last year around this time the counter was 80%. Exports spiked last month as farmers and exporters took advantage of a government-set favorable exchange rate for grain transactions.