Russia and Ukraine signed an agreement this afternoon to allow grain exports from Black Sea ports.
Global grain prices fell further this morning in response to the possible signing of the deal.
November 2022 UK feed wheat futures contracts stood at £262/t at 2pm on 22 July, £5.20/t lower than when markets opened this morning. Futures are now more than £30/t lower than last month.
Paris milling wheat futures have been extremely volatile, with markets opening at €340.50/t (£289.87/t) before falling to €329/t (£280.80/t) and then back down to €336 /t (£286.04) rose /t) at 2 p.m.
See Also: Black Sea Grain Export Corridor – Deal Could Come This Week
The farm gate prices follow the broader market.
Spot farm-gate wheat prices in the UK, as collected by Farmers Weekly on July 22nd, fell by £5.93/t from the previous week to an average of £237.5/t. Milling wheat ex-farm fell by £10/t from last week’s level to £282/t.
Feed barley prices also fell ex farm, falling by £6.29/t to £209/t on the week.
The deal was signed at a meeting between Ukraine’s Infrastructure Minister Oleksandr Kubrakov, Russian Defense Minister Sergei Shoigu and UN Secretary-General Antonio Guterres in Istanbul.
Grain exports are reportedly due to start as soon as next week.
Speaking to Farmers Weekly on Friday (July 22) before the agreement was signed, Cefetra grain origination manager Simon Wilcox said the potential agreement was 100% behind today’s price drop.
Mr Wilcox said: “Personally I’m not convinced even if they sign it that they can practically deliver it as there are so many issues around insurance. There are a number of practical issues, but if the market reacts and believes that the 20 million tons of wheat are now available to ship, then the supply and demand of the market will fundamentally change.”
Harvest pressure, lack of shipping, limited storage space and weather issues are also playing a role in putting pressure on the market, according to Wilcox.
market prospects
Mr Wilcox said: “There is a chance that prices will drop even further as grain exports from Ukraine open up. However, if that is not the case, I am adamant there will be a rebound as the true ramifications of the inability to get all the grain out of Ukraine materialize and markets tighten.
“I think we have to expect that this market will continue to be extraordinarily volatile,” he said.
canola
Farm-gate prices for rapeseed have collapsed in the past week. Prices collected by Farmers Weekly on 22nd July averaged £502/t, down £40.67/t from the same time last week.
Market drivers behind this decline are low water levels in continental Europe making ship movement difficult, increased planting in Canada, exchange rates and the ongoing talks in the Black Sea region.
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