Global grain markets volatile with Black Sea deal in doubt
© glebzter/Adobe Stock Threats to grain exports from the Black Sea region and weather concerns in the US are both weighing on global markets, with prices seeing some support.
The Black Sea Grain Initiative is due for renewal on Monday 17 July, but an extension had still not been agreed when Farmers Weekly went to press midweek and Russia was reportedly threatening to pull out of the deal.
See also: Erratic wheat markets extend gap between new and old crop
Countries in central and eastern Europe have been adversely affected by high volumes of Ukrainian grain arriving over land, with stores being filled which is creating issues as harvest begins.
Istvan Nagy, Hungarian minister for agriculture, has called for the Black Sea deal to be extended and rolled out to other ports in the region.
Romania could offer an alternative to the grain corridor for Ukrainian exports, according to grain trader Frontier, with its Constanta port expanding its throughput of Ukrainian grain and oilseeds to 27m tonnes.
Figures from the United Nations Joint Coordination Centre show that almost half (48.7%) of the shipments through the Black Sea corridor to date have gone to Europe and Central Asia, with 27% going to East Asia and 15% going to the Middle East and North Africa.
Market gains
Both Chicago and Paris futures have made small gains in the past week and UK futures have followed this wider trend.
November 2023 UK feed wheat futures rose £3/t on the week to open at £195/t on 12 July.
Global markets were also waiting anxiously midweek for the release of the US Department of Agriculture’s (USDA) latest world agricultural supply-and-demand estimates report.
It is expected to show a drop in yields in the US as a result of droughts in some regions, but recent rainfall may have helped offset some of these losses.
Looking at Europe, ADM Agriculture reported that crop estimates in the main EU wheat-producing countries had slipped in recent weeks, due to hot and dry conditions affecting yield potential.
However, the trader said the EU wheat crop is still projected to be above last year’s levels.
A record wheat crop forecast in Brazil is also putting some pressure on global markets.
UK crop development
Arable crops in the UK are reaching maturity and harvest has been getting under way in some regions this week, in-between rain showers.
The AHDB’s latest arable crop reports tha 76% of the GB winter wheat crop is in “good” or “excellent” condition, a marginal improvement on the same period last year.
Winter barley has also improved on the year, with 84% of the crop classed as either “good” or “excellent” for the week ending 4 July, up from 80% this time last year.
Winter oilseed rape had 63% of coverage classed as “good” or “excellent”.
Spring cereal crops are more varied, with later-drilled crops affected by dry conditions earlier in the year, while early spring-drilled crops seem to be faring better.
Some 69% of spring wheat and 52% of spring barley crops were rated as either “good” or “excellent” in early July.