Black Sea grain export deal signed – markets expected to fall further

Russia and Ukraine signed a deal this afternoon to permit grain exports from Black Sea ports.

International grain costs had fallen additional this morning in response to the doable signing of the settlement.

November 2022 UK feed wheat futures stood at £262/t at 2pm on 22 July, down by £5.20/t from when markets opened earlier this morning. Futures are actually down by greater than £30/t on month-earlier ranges.

Paris milling wheat futures have been extraordinarily unstable, with markets opening at €340.50/t (£289.87/t) earlier than falling to €329/t (£280.80/t) after which rising once more to face at €336/t (£286.04/t) at 2pm.

See additionally: Black Sea grain export hall – deal might come this week

Ex-farm costs are following the broader market.

UK spot ex-farm wheat costs collected by Farmers Weekly on 22 July had been down by £5.93/t on the earlier week, averaging £237.5/t. Ex-farm milling wheat was down by £10/t on week-earlier ranges to £282/t.

Feed barley costs additionally fell for ex-farm, dropping by £6.29/t on the week to £209/t.

The deal was signed at a gathering in Istanbul between Oleksandr Kubrakov, Ukraine’s minister of infrastructure, Russia’s defence minister Sergei Shoigu, and UN secretary-general Antonio Guterres.

Grain exports are reportedly anticipated to start as quickly as subsequent week.

Chatting with Farmers Weekly on Friday (22 July) earlier than the settlement was signed, Cefetra grain origination supervisor Simon Wilcox mentioned the potential settlement was 100% behind the autumn in costs earlier at the moment.

Mr Wilcox mentioned: “Personally, I’m not satisfied even when they signal it, that virtually they’re going to have the ability to ship it as there are such a lot of points round insurance coverage. There’s a entire raft of sensible points, but when the market reacts and believes that the 20m tonnes of wheat is now accessible to ship out then it basically adjustments the availability and demand of {the marketplace}.”

Harvest pressures, lack of transport, restricted space for storing and climate points are additionally taking part in a component in placing downward stress available on the market, in accordance with Mr Wilcox.

Market outlook

Mr Wilcox mentioned: “There may be potential for costs to go down a piece additional if grain exports from Ukraine open up. Nevertheless if it doesn’t, I strongly consider there can be a bounce again because the true implications of not having the ability to get all of that grain out of Ukraine hit, and markets develop into tighter.

“I feel we have now to count on this market to proceed to be exceptionally unstable,” he mentioned.

Oilseed rape

Ex-farm costs for oilseed rape have slumped prior to now week. Costs gathered by Farmers Weekly on 22 July averaged £502/t, down by £40.67/t on the identical time final week.

Market drivers behind this drop are low water ranges in continental Europe, making barge actions troublesome, elevated plantings in Canada, trade charges and the continuing talks within the Black Sea area.