The question of whether or not there will be a new term for the grain deal remains unanswered. In any case, during the two-day summit in Turkey, the parties did not reach an agreement. But that a rabbit is conjured out of the hat at the last minute, we have seen before. The American market is eagerly awaiting the new Wasde report that will be released tonight Dutch time. Analysts expect a bearish story, but here too we have seen more than one surprise in the last year.
On the Matif, the September wheat contract moved mainly sideways. Ultimately, the stock closed €0,25 lower at €232 per tonne. Wheat did make a move on the CBoT. Both the May and July contracts closed 14¢ lower. The July contract lost 2,2% to $6.27¼ per bushel. Corn also took a hit and the July contract fell 2% to close at $5.82¼ per bushel. Soya ended the day in the green. The May contract closed 0,5% higher at $14.43¼ per bushel. For the July contract, the plus remained very modest at 0,1% and closed at $14.05½ per bushel.
The two-day consultations in Istanbul on the extension of the grain deal produced little concrete information. The four parties involved (Russia, Ukraine, Turkey and the UN) have not been able to reach an agreement. “The parties presented their vision and agreed to move forward,” the UN said in a statement. During the consultations, UN proposals were also put on the table, such as resuming Russian ammonia exports via the Tolyatti Odesa pipeline, a longer extension period and a better design for inspections.
Big gap
According to Ukrainian Deputy Prime Minister Oleksandr Kubrakov, the grain deal should be extended for a longer period and more ports should be able to use it. Russia has a list of demands to improve its own grain and fertilizer exports. Access to the international payment system Swift is particularly important for the Kremlin. If Russia's wishes are not met, "the grain deal will cease to exist," according to Russian State Secretary for Foreign Affairs Sergei Vershinin. Linda Thomas-Greenfield, the US envoy to the UN, does not agree with this Russian criticism. "Let me be clear, Russia can still export. It is exporting an amount of grain and fertilizer comparable to before the invasion, if not more."
The Kremlin said Putin might be available for a phone call with Turkish President Erdogan about extending the deal, if necessary. This has not been used and the conversations are continued digitally. Time is starting to run out. The current deal expires on May 18. The uncertainty continues to hang over the market, but the previous times when the deal had to be extended, it was all only arranged at the last minute with a lot of fiddling around. Consider, for example, the drone attack on the Russian Black Sea Fleet in October 2022, after which Russia also withdrew from the grain deal, at least temporarily, as it turned out.
Records
On the American stock market, players are taking positions in the run-up to the May edition of the Wasde report, which will be published tonight Dutch time. Analysts expect the USDA to send a bearish signal, especially in corn, partly due to the favorable weather for sowing so far this spring. In the disappointing American grain exports, analysts see another signal that the USDA is trying to temper expectations.
Yield records are being broken in Brazil. At least that is what the statistical office Conab predicts. The total soy harvest is estimated at 154,8 million tons in Conab's May report that was released yesterday. That is almost a quarter more than last season. The corn harvest is forecast to be 125,5 million tons, or an increase of more than 10% compared to last year. The total harvest of cereals, oilseeds and legumes at 313,9 million tons. All in all, the average yield is 4 tons per hectare. That is above the average yield per hectare in the record season 2016/17.