Ukraine's grain exports continue to demand attention from the market. The UN has launched a new attempt to secure the extension of the grain deal beyond mid-July. Hungary, meanwhile, continues to protest against the free access of agricultural products from Ukraine. The Hungarian farmers are disproportionately affected by the European support through the removal of trade barriers, the government believes. In the US there is less attention for the problems in Ukraine, but the focus is more on the weather reports.
The wheat quotation on the Matif took a step back yesterday by €2 to €218,25 per tonne. That is the lowest quotation in 22 months. On the CBoT, grain prices showed a cautious recovery after Tuesday's losses. The July contract rose 0,5% to $5.94¼ a bushel. Soy also showed a cautious plus of 0,3%, reaching $12.99¾ per bushel. Corn was unchanged at $5.94 per bushel on the Chicago exchange.
The UN is making a new attempt to save the Black Sea grains deal. Reuters reports this based on a well-established source. The UN is trying to reopen the ammonia pipeline that runs through Ukraine to Crimea. The difficulties Russia is experiencing with the export of fertilizer is one of the arguments put forward by the Kremlin against a further extension of the grain deal, in addition to the connection to the Swift international payment system.
The Ukrainian authorities report to Reuters that it will take approximately thirty days to get the ammonia pipeline operational again. Ukraine, meanwhile, accuses Russia of not complying with the current grain deal. The Ukrainian State Secretary for Reconstruction said on Tuesday that he would only cooperate in the export of ammonia from Russia if there were guarantees that the grain deal would continue to function normally.
Hungary requests extra support
Hungary has asked the EU to maintain import restrictions on grain and oilseeds from Ukraine for the five eastern member states until at least the end of 2023. Hungary has also appealed for support for its own farmers to remove grain left in stores for the new harvest. The EU has yet to respond to the requests from Hungary.
Hungary and to a lesser extent Poland, Romania, Bulgaria and Slovakia have been on a collision course with the European Commission for some time in the field of grain imports from Ukraine. The Commission largely lifted import restrictions on agricultural products from Ukraine following the Russian invasion. The influx of grain in particular from Ukraine has significantly disrupted the market in the five EU member states and to rectify this, the EU last month introduced a support package and additional conditions for the transit of grain. Hungary believes that these measures do not go far enough.
Minor tuning
The negative mood continues to prevail on the grains market in a broad sense, several analysts say. Good soy and corn yields in Brazil, ample supply of relatively cheap wheat from Russia, faltering exports from the US and disappointing economic growth figures from China dampen the mood. However, the major uncertainty remains the weather, and it is mainly the forecasts for the US Midwest that are much talked about. Now that the corn is largely available in this area, a shower would be welcome. However, there is little to no precipitation in the forecast for this area until mid-June. In itself no reason to panic, but then the weather has to change by mid-June. According to experts, if the drought lasts longer, it will cost yields.