Analysis Grains & Commodities
Grain market starts cautiously in 2023
There is no news to really get grain prices moving on the first trading day of the new year. Ukraine today published export figures that show that exports are lagging considerably behind last season.
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Choose the subscription that suits youThe March wheat contract on the Matif closed last Friday at €309,25 per tonne. During this trading day, the listing on the Paris stock exchange does not show any major price movements. While writing this article, wheat is down €1. There is no trading on the CBoT today due to New Year's.
The cold that hit the US around Christmas is keeping things busy on the wheat market. Wheat has almost certainly been wintered out by the cold, but few analysts dare to make statements about the exact extent of the damage. There is therefore a certain frost premium in the wheat quotations, but this is intuitively on the low side, according to some analysts.
Cheap offer
The supply of relatively cheap wheat from the Black Sea region puts an upside in the European wheat market. According to market agency Sovecon, Russia has had a very good grain harvest with possibly even a record yield. Russia will have to sell a significant part of this wheat on the world market because buyers are not clamoring for Russian wheat. The grain is therefore put on the market at a competitive price. To help Russian exports, the Kremlin is attempting to hinder wheat exports from Ukraine. There has been a lot of fuss about the grain deal in recent months. Ukraine's ports on the Black Sea are also still closed and Russian attacks on infrastructure occasionally cause problems for grain exporters.
The difficult export is clearly reflected in the Ukrainian export figures that the Ministry of Agriculture published today. Compared to a year earlier, grain exports are 30% behind last season. In the first half of the 2022/23 season, Ukraine exported 8,4 million tons of wheat compared to 15,8 million tons a year earlier. Barley exports fell by 68,8% to 1,6 million tonnes in the first half of this season compared to 5,2 million tonnes last season. Corn was actually exported more, against the trend. This season, 12,5 million tons have already been exported compared to 10,8 million tons last season. Under the grain deal, 16,3 million tons of grain were exported, according to the United Nations, with corn as the main export product.
