The grain market remains volatile and that is evident again today (Monday 21 August). Last week the quotations seemed to have found their way up again, now the stock market is turning red again. Ukraine is working on a solution to the Black Sea blockade and has now found a possible way out. The European Commission also released the Mars Bulletin today, but it contained no surprises.
The direction that was taken on the grain market on Friday does not seem to have any real follow-up today. On the Matif, wheat is down 1,8% at the time of writing and before the market closes and on the CBoT the price is 2% lower. Corn is also in the red with a loss of 1%. Soya is the exception and shows a limited increase of 0,6%.
Ukraine is considering creating a new safe route for grain ships across the Black Sea on its own initiative. This was announced by a spokesperson for the Ukrainian Ministry of Agriculture. Last week, a container ship that had been stuck in a Ukrainian port since the Russian invasion was evacuated along this route. And now Zelensky's government apparently dares to discuss grain transport along this route. The route may be further tested with new evacuations of other ships that have been forced to remain stranded for a year and a half.
Insurance
Another major hurdle that still needs to be overcome for this alternative plan is the insurance of the ships. Insurers are not keen to process ships that want to cross high-risk areas. The result: sky-high premiums. The Financial Times reports that Ukraine is in discussions with major insurers, including Lloyds of London, about a suitable solution.
The EU is considering giving Ukraine a helping hand in grain exports by subsidizing transport through member states, the Polish public radio broadcaster reports. Several eastern member states have banned grain from Ukraine due to the distortive effect on their own markets. Europe is now expected to impose a transport fee of €30 per tonne. It is not known where the broadcaster got the information from and the message has not (yet) been confirmed by other parties.
Too dry and too wet
The European Commission released the August edition of the Mars bulletin. Not contrary to expectations, the report reports little new under the sun. Northwestern Europe is wet, southern Europe is dry and the Balkans were too dry, but in places they have now been washed away. It has little influence on winter wheat overall, more, but the crops sown in spring have still been put further behind, according to the JRC. This is actually only reflected in figures for grain maize and spring barley, the potential yield of which has been reduced by 1% compared to last month.