No resumption of the grain deal in Russia, which is now launching targeted attacks on alternative export routes. While it is not possible for one of the parties to force a breakthrough on the battlefield, Ukraine is increasingly cornered in the field of grain exports.
The September contract for wheat on the Matif closed €1,75 lower yesterday at €215,50 per tonne. The other contracts for the 2023 harvest were on the rise. The most traded contract is the December contract, which increased €3,75 to €237,25 per tonne. On the CBoT, the most traded wheat contract rose 1,6% to $6.09 per bushel. Corn moved mostly sideways with a 0,1% gain for the September contract to $4.71½ per bushel. Soy closed 0,8% higher at $13.60¼ per bushel.
The export of wheat from Ukraine remains a headache. A resumption of the Black Sea grain deal does not seem to be possible for the time being, so Ukraine is relying on exports via other routes. The Ukrainian ports in the Danube estuary are among the most important alternatives. And that is what Russia has focused on in its warfare. Last night there was another drone attack on Izmajil.
Cornered
The Russian attacks are affecting Ukraine's ability to export grain, Romanian President Klaus Johannis told the press yesterday after a meeting of the Three Seas Initiative (an association of twelve EU member states on or near the Baltic Sea, Black Sea and Adriatic Sea). ). “We will improve the other routes, we have opened our territorial waters to Ukrainian sea transport via the Black Sea and we will continue to improve exports by rail and road,” Johannis told. In a sense, a remarkable statement because Romania is one of the group of five countries that has enforced a ban on grain from Ukraine to prevent disruptions to the domestic market.
Russia is taking a risk with the attacks on Ukrainian facilities on the Danube. Some drone strikes are less than a kilometer from the Romanian border. One drop-off that ends up on the territory of NATO member Romania and there is at least a major diplomatic row between NATO and Russia, several experts warn.
In America, the grain market remains under the spell of the weather. At first glance, this gave a somewhat contradictory picture. Rain fell in parts of the Midwest last day. However, analysts say it is too little too late to slow the rapid decline of corn and soy. Corn is already starting to ripen considerably in the US, as is early soy. From a quality point of view, according to some experts, it may not hurt that it remains mainly dry in the coming weeks.