You would almost think that Ukraine is the center of the grain market. The country is partly allowed to export freely to the EU again, although some member states have now imposed restrictions on their own. Furthermore, experiments are being conducted with transport across the Black Sea. In Brazil, growers have now started sowing soy. In terms of fieldwork under good conditions, but in terms of market development less favorable according to local sources.
Wheat prices are down 2% on both the Matif and the CBoT at the time of writing this article (before market close). Corn and soy are also in the red, but with a decline of more than 1%, the loss remains more limited than with wheat.
The import of grain from Ukraine to the EU is causing great division. Under pressure from five EU member states, Brussels was forced to impose import restrictions on grain from Ukraine to prevent disruptions to the internal market. However, the current package ran until September 15 and the EU has decided not to extend the restrictions, much to Ukraine's relief. Poland, Hungary and Slovakia are less happy with the removal of sanctions and have unilaterally decided on import restrictions. This, in turn, angers Ukraine, which says it plans to file charges against the three countries with the World Trade Organization.
Support
Ukraine is supported by Spain, which calls the ban illegal. According to the Spanish Minister of Agriculture, it is up to the European Commission to assess whether EU member states have broken the rules, he said today during a planned meeting between European Ministers of Agriculture. French Minister of Agriculture Marc Fesneau was also critical of the unruly EU countries. "To have solidarity there must be unity. We must uphold those two elements, otherwise the European project will be at risk. The internal market is a fundamental element."
A few months ago, Romania and Bulgaria were the other member states that had major objections to the import of grain from Ukraine. They are now staying under the radar, it seems. The Romanian farmers' interest groups have called for a grain ban, but the government does not seem to immediately go along with this. Ukraine has meanwhile submitted a request to the Romanian port authority of Constanta to allow ship-to-ship loading. This could drastically increase transit on the Danube. Now all grain is still loaded onto barges.
Ukraine is also making cautious progress with the export of grain across the Black Sea. For the first time since the collapse of the Black Sea grain deal, two ships sailed to Ukrainian Black Sea ports to pick up grain destined for Africa and Asia. These ships use the route previously used by ships that have been stuck in Ukrainian ports since the start of the war. This route runs close to the Romanian and Bulgarian territorial waters.
Starting with soy
In Brazil, growers have started sowing soy. According to various sources, growers are optimistic about the expectations for this growing season. Sufficient moisture in the soil but not too wet to enter the field. The weather phenomenon El Niño can still cause problems later in the season. That usually means drought for Brazil. In terms of prices, a step could still be made according to Brazilian growers. Due to an unfavorable exchange rate and somewhat disappointing demand from abroad, prices on the Brazilian market are under some pressure.