President Erdogan of Turkey announced a resumption of shipments yesterday, agreed by Russia, reported CRM Agri.
Nevertheless, the grain corridor deal is still set to expire on November 18, and there is little guarantee of an extension, said the analysts.
Turkey and the UN had helped keep corridor operating this week, without Russia’s participation, as the Kremlin withdrew from the agreement on Saturday.
However, Russia’s defense ministry stated yesterday that it had received guarantees from Kyiv that Ukraine will not use the Black Sea grain corridor for military operations against Russia, which was enough to justify Moscow’s decision to resume the implementation of the agreement.
“Consequently, corn, wheat and rapeseed prices unwound much of the early week gains,” said the UK grain and oilseed market specialists.
Looking beyond the Black Sea, and there have been protests in Brazil following the outcome of the presidential election at the weekend, which resulted in the blockage of infrastructure to transport grains and oilseeds to ports.
“Combined with the ongoing dry weather conditions in Argentina and a cold snap in Brazil, soybeans have continued to find support,” said the analysts.
Interest rate hike
Turning to macroeconomic developments, the US central bank has approved a hike in interest rates, in an attempt to bring down price inflation.
The Federal Reserve said it was increasing its key interest rate by 0.75 percentage points, raising it to its highest level since early 2008.
“The increase is expected to severe another blow to the economic outlook for 2023 and will continue to put pressure on other central banks to raise their domestic interest rates. The Bank of England will meet at the end of the week, where a similar 75 basis point interest rate hike is also projected,” commented the CRM Agri team.