Grain exports from Ukraine continue to raise concerns. The ships are sailing on the new routes again, but there are still some things going on in the background. Today it was also announced that a trade agreement between the EU and Australia has been put on hold for the time being. In the corn and soy market, it is the weather reports for South America that determine the direction.
The grain market has not yet seen any major changes this trading session. Wheat is up a few tenths of a percentage point on the Matif at the time of writing (before market close) while wheat is down a few tenths on the CBoT. For soybeans, the loss amounts to almost 0,5%. Corn is almost equal to last Friday's closing price.
Corruption
The temporary halt to the humanitarian corridor, as Ukraine calls its own alternative to the Black Sea grain deal, continues to raise questions. Last Thursday (October 26), a British maritime security company linked it to a Russian threat that had temporarily suspended merchant shipping. The Ukrainian Deputy Prime Minister debunked that story on X (formerly Twitter) on Friday. The message came down to challenging circumstances under which the deal was concluded and that there could therefore be a hitch. Some sources mention yet another reason for the temporary pause in exports. Kiev is said to have temporarily halted exports due to problems with taxes and customs. In short, the central authority is trying to take steps against corruption in its own ranks and is introducing new rules and procedures regarding export certificates and refunds and payment of sales tax.
Australia has rejected European proposals for a free trade zone, the Australian government announced today. The major stumbling block is access to the EU with agricultural products. "We saw that the EU did not want to provide sufficient access for products such as meat, dairy and sugar," Australian Agriculture Minister Murray Watt told ABC Radio. Until the 2025 elections, the Australian government will no longer discuss a free trade area with the EU, Watt told the same radio station. Negotiations on the treaty have been ongoing since 2018.
Stupid deal
Farmer advocates in Australia were strongly against the 'dud deal', loosely translated as 'stupid deal', as they called the trade agreement. The interest groups felt that Australian agriculture fared poorly compared to trade agreements between the EU and New Zealand, Canada and South America, which would have greater access to the European market. The consequences of temporarily cutting off a free trade area between the EU and Australia are not too bad. However, it does fit in with a broader trend, such as the long-standing issue of the Mercosur treaty with a number of Latin American countries. The EU's internal market is one of the largest in the world and countries from outside the bloc are eager to have access to European consumers and businesses.
For corn and soy, analysts mainly look at developments in Brazil and Argentina. In Brazil, rainfall is very unevenly distributed. In the south it is much too wet and everything is almost drowning, while in the west and central part there has been too little precipitation so far to get the soy growing. In both cases, growers are partly waiting for better conditions. Soya can be sown until mid-December without too many problems, but late sowing will hinder subsequent cultivation of maize. In Argentina, rain brings some relief after the very dry years that farmers there have had. It no longer makes a difference for winter wheat, according to analysts, but soya in particular can still fully benefit from it. It will be tight for soy processors to survive with current stocks until the new harvest, some analysts warn.