The attention of the markets “traditionally returns to subjects related to the weather”, points out Paul Désert-Cazenave, head of market analysis at Grainbow.
He observes that the influence of “geopolitical risk has diminished a little since the end of the agreement” which allowed Ukraine to export its cereals despite the conflict with Russiawhose extension Moscow refused in July.
In addition, the risk of “future droughts, known to the markets”, has been integrated and therefore no longer causes prices to change, according to him.
On Wednesday, around 3:50 p.m. GMT, the price of wheat rose by 1.75 euros per tonne on Euronext to 228.25 euros at maturity September 2023 compared to the previous day’s close. A bushel took two cents in Chicago.
On the subject: Wheat sinks again below 240 €/t
A tonne of corn maturing in November 2023 was stable on Euronext (215.25 euros) and took two cents a bushel in Chicago. A bushel of soy took a cent.
The Ukrainian port facilities of Izmail (southern Ukraine), on the Danube, were targeted on Wednesday by russian strikescausing damage to grain silos and warehouses.
Tonight, Russia destroyed 13,000 tons of grain in the port of Izmail, Odesa region. Russia deliberately launched the Shahed drones on the agricultural infrastructure, hitting the grain storage and shipment complexes. The destroyed grain was supposed to be shipped to Egypt and… pic.twitter.com/QAzHTSrLU1
— Ukraine.ua (@ukraine_ua) August 23, 2023
According to the Ukrainian Ministry of Agriculture, 270,000 tonnes of grain have been destroyed in one month by repeated attacks on the country’s sea and river ports.
Since the expiry of the grain agreement in the Black Sea, insurers have terminated their risk coverage in the area, further complicating the exit of grain from Ukraine.
According to Jack Scoville, of Price Futures Group, “progress” is in sight on this point for ships entering the Black Sea, a prospect likely to ease wheat prices.
On the subject: Ukraine could again export its cereals through the Black Sea
Risks of droughts
However, “if Ukraine is still able to ship its goods by land via the EU, it is unlikely that a shipowner or a marine insurer will take the risk of the passage of Ukrainian grain, nor perhaps even Russians, by the Black Sea,” said Mr. Scoville.
On Friday, Ukraine and its western neighbor Romania reached an agreement to speed up the delivery of goodswith an objective announced by the Romanian government for the transit of 60% of Ukrainian cereals.
Read also: The massive arrival of cereals sows chaos on the Romanian port of Constanța
On the European market, prices tend to adjust downwards to “find outlets” in the face of the competitiveness of Russian wheat, driven by harvests that promise to be good, emphasizes Paul Désert-Cazenave.
In the United States, “weather forecasts remain generally dry and warm for the Midwest this week and the next two”, reports Jack Scoville, while “crops will need constant rains to maintain their condition due to the lack of ‘soil moisture’, consequences of three months of drought until the end of June.
The well-attended “crop tour in the United States of the specialized media Pro Farmer has begun. In particular, it passed through the states of Ohio and South Dakota and the survey showed that yields are better” than last year for corn and soybeans, leading to a course relaxation earlier this week, recalls Dewey Strickler adviser at AG Watch.
1st 4 stops thru Ute Ia. Corn 186.97 all stops were in the valley. 1195.37 pod count on the same 4. Minor greensnap on corn. Topsoil quite dry. #pftour23 pic.twitter.com/5B1RQRk2vW
— Tim Gregerson (@CornKng333) August 23, 2023
Additionally, nearly 60% of corn and soybean crops are in “good to excellent” condition, according to the US Department of Agriculture’s Crop Condition Report.
In Chicago, the week was marked by US corn sales to Mexico, in all more than 61 million tonnes, as well as 159,000 tonnes of soybeans for a destination that remains unknown.
With the exception of these orders, American corn is still in low demand and is suffering against its Brazilian counterpart whose “harvest is underway” with “export prices which are becoming relatively cheap”, underlines Mr. Scoville, Brazil thus obtaining the contracts according to him.
To monitor changes in the prices of agricultural commodities, log on to Terre-net.fr’s agricultural markets
2023-08-23 17:44:43
#Markets #attentive #weather #conflict #Black #Sea
