Growing grain is fun, but the intention is to get it to the buyers. That is no easy task. In the EU, wheat exports are lagging behind last season. In Ukraine, exports are better than last season. There, farmers are very concerned about a proposed increase in rail tariffs. In Canada, access for grain exporters to the Asian market is being restricted. The cause of this is a major strike in the port of Vancouver.
The December wheat contract on the Matif closed yesterday €1,50 lower at €218,75 per tonne. On the CBoT, wheat closed 0,8% lower at $5.78 per bushel. Corn also took a step back, losing 0,4% to $4.11¾ per bushel. Soybeans closed 3 cents higher at $10.42¼ per bushel.
The EU has exported 22 million tonnes of wheat this season up to 5,86 September. Last season, 7,67 million tonnes of wheat were exported in the same period last season. The export deficit has increased slightly compared to last week, from 23% to 24%. More soy and corn have been imported this season. The EU imported 4,72 million tonnes of corn compared to 4,23 million tonnes last season and 2,81 million tonnes of soy compared to 2,73 million tonnes last season.
In Ukraine, grain exports are better than last season. The Ukrainian Ministry of Agriculture announced today that 25 million tons of grain and oilseeds were exported this season until September 9,76. Last year, the counter stood at 6,15 million tons at this time.
Cost increase
There is unrest among Ukrainian grain growers over plans to increase rail freight rates. The state-owned Ukrainian Railways Ukrzaliznytsia wants to increase freight rates by 7%. According to the Ukrainian farmers' union UCAB, the rate increase for farmers will be much higher. The proposed rates would increase the cost of transporting empty wagons by 67%. "The cost of transporting grain would increase by 50 to 60 hryvnia (around €1 to €1,30) per tonne. This amounts to an additional cost of up to 2 billion hryvnia (around €44 million) per season for Ukrainian grain growers," the UCAB said in a statement. According to UCAB, farmers in Ukraine are already struggling due to the war and the sharp drop in grain prices. Making rail transport more expensive would further hamper farmers and could further reduce grain production and exports.
Staking
In Canada, there are also problems in logistics. Yesterday, workers at the six major grain terminals in the port of Vancouver went on strike. Salary negotiations between unions and employers stalled last week. Canada is the largest exporter of canola and a major exporter of wheat. According to the Canola Council of Canada, the strike could have major financial consequences if unions and employers do not reach an agreement soon.
The strike comes at an unfortunate time for Canadian farmers. The grain harvest is still ongoing in Canada and yields are good on average. Farmers and traders therefore want or need to sell part of the harvest quickly on the world market. Vancouver is the most important port for exports to Asia. Part can be shipped via ports in the US. If the strike lasts a few weeks, the effects on the market will be limited, according to traders. If the strike lasts longer, it could depress prices for wheat and rapeseed on the North American market, according to experts.