A breakthrough in the Black Sea grain deal just won't happen. During the G20 summit it was mainly an exchange of well-known positions between the countries. The UN did offer an opening, but Russia did not want to take the bait. China is now taking the lead in the soy trade.
The European and American wheat markets are keeping pace with each other, with a decline of approximately 1% on both exchanges at the time of writing (before market close). Soy is cautiously on the rise with a plus of about 0,5% and corn is mainly moving sideways with 0,1% in the green.
World leaders were unable to make a breakthrough on a resumption of the grain deal during the G20 summit in India last weekend. Russia insists that the grain deal can only be resumed if all Kremlin demands are met. The West, through the US, believes that the ball is now really in Russia's court and that the Kremlin must move. Turkey is in between and mainly advocated quickly reconnecting the Russian agricultural bank to the Swift system and re-insuring ships for the Russian export of grain and fertilizer.
Guide
The UN appears to be willing to move on the issue of payment transactions. The bank's Luxembourg subsidiary could immediately apply for access to Swift and be connected within thirty days, the UN wrote to Russia in a letter seen by the Reuters news agency. The UN's requirement is that Russia immediately participate again in the grain deal. But the Kremlin does not want to agree to this for the time being.
Ukraine is on a collision course with Poland over grain exports. Five EU member states, led by Poland, have negotiated additional conditions to limit the inflow of cheap grain from Ukraine. According to the countries, local farmers were pushed out of the market by an abundance of Ukrainian grain entering the EU because the Black Sea ports are no longer accessible. After the five initially took unilateral measures, Brussels reluctantly agreed to a package that stipulates that grain must be transported and not left in the Member States. However, that current package expires on September 15. And while Poland, Romania, Bulgaria, Slovakia and Hungary are pushing for an extension of import restrictions, Ukraine is strongly opposed to this. "Poland is not an important market for us. What is important is that export restrictions are lifted," Taras Kachka, the Ukrainian State Secretary for Economic Affairs, told Bloomberg. Ukraine threatens to go to the World Trade Organization if Poland takes its own measures. He further made it clear that Ukraine is working on safe routes across the Black Sea without support from Russia. Ukraine has a free right of navigation according to Kachka, with or without a grain deal.
Records
China imported a lot of soy last season beyond expectations. According to the foreign affairs division of the US Department of Agriculture, China imported 31 million tons of soy last season (which runs through August 101). That is a record amount. For the upcoming 2023/24 season, the USDA expects China to import 98,5 million tons of soy. And it wasn't just China that broke a record. Brazil exported 80,85 million tons of soy this year according to Secex.