Russian bear not only growls, but also bites

After a stormy start to the trading day, the worst of the dust has now settled somewhat. Shortly after opening, the September contract for wheat on the Matif went from the closing price of €231,75 to €238 per tonne. While writing this article, this has dropped to €233,75 per tonne. That is still a plus of 0,9% compared to Friday. There was also a small rally in wheat on the American stock exchange shortly after opening, but at the time of writing the prices of the contracts for the 2023 harvest are almost the same as last Friday's closing position.

There is more action in this regard in corn and soy. Corn is down a few tenths of a percentage point, partly due to a good harvest in Brazil, while soy is almost 0,5% higher due to doubts about the status of this crop in the US.

Russia has withdrawn from the Black Sea grains deal that guaranteed grain exports from Ukraine's Black Sea ports for a year. The Kremlin announced this at the end of the morning. According to Moscow, the agreements made with Russia are not achieved by the other parties. "The Black Sea agreements are no longer valid as of today," Russian state news agency Tass quoted Kremlin spokesman Dmitry Peskov as saying. "As the President of the Russian Federation previously said, July 17 was the deadline. Unfortunately, the part of the agreements relating to Russia has not been implemented. Therefore, the deal has been terminated." In addition to the agreement regulating the export of grain through the Ukrainian ports on the Black Sea, there is also a second document in which commitments have been made to allow Russia to maintain access to the world market for agricultural products and fertilizers despite Western sanctions. Russia has cited, among other things, the disconnection of Russian banks from the Swift payment system and the blocked fertilizer pipeline running through Ukraine as breaking points.

UN confirms end of grain deal
Russia still leaves the door open for a possible extension. "As soon as the conditions set by Russia are met, we can put the deal back into action," Peskov told Tass. Russia informed the other parties (Ukraine, Turkey and the UN) of the decision to withdraw from the grain deal in a letter to the Joint Coordination Center in Istanbul, which is responsible for implementing the deal. A UN spokesperson confirmed this to Politico. Russia emphasizes that the halt to the grain deal has nothing to do with the attack on the Crimean bridge early this morning. You just can't help the impression that the heavily damaged car section of the bridge will not exactly make Vladimir Putin mild. The Crimean Bridge is surely the pride of the Russian president.

Shipowners and insurers are not keen on a trip to the Black Sea
The last ship sailing under the deal left the port of Odessa on Sunday and it appears that shipowners are not eager to send ships to Ukraine. In any case, shipping insurers are scrutinizing their conditions critically. "Some underwriters are trying to make a profit from the resulting unrest and are implementing a significant rate increase. Others have stopped insuring ships in Ukrainian waters altogether. However, the big question is whether Russia will lay naval mines in the area. If that happens In fact, ships can no longer be insured," a source from the insurance world told Reuters. In most cases, war damage is not covered. In any case, Lloyd's of London, the largest exchange for marine insurance, has already placed the Black Sea region on the list of high-risk areas. Another anonymous source from the insurance world told Reuters that shipowners also do not receive much information about insurance for the Black Sea region. "Hazard pay in the rental rate is probably necessary to be able to charter ships, not to mention the additional insurance costs."

Northern US remains dry
You would almost forget, but a lot is also happening outside the Black Sea region. The drought in the US in particular is often mentioned in various market comments. Little or no rain has fallen on the northern prairies and western Cornbelt. Spring wheat, corn and soy in the region are in desperate need of a drink of water, but that is not expected for the time being. The long-term forecast from the American Meteorological Institute predicts a below-average amount of precipitation in the area for the last half of July.