Wheat market impacted as fears Black Sea conflict will escalate

By Jane Byrne

- Last updated on GMT

© Two cargo ships in the port of Odessa, Ukraine © GettyImages/1Solnce
© Two cargo ships in the port of Odessa, Ukraine © GettyImages/1Solnce

Related tags Ukraine Wheat Maize Soybean

The escalation of the war between Russia and Ukraine threatens to curb wheat supplies from the Black Sea region in the short-term, finds a AHDB report.

Global grain markets continued to climb last week, as per that outlook. Chicago wheat futures (May-23) were up 3.6% over the week.

"Global grain markets have become accustomed to aggressive exports from Russia and Ukraine over the past few months, but recent escalations are putting the UN-brokered deal at risk (Refinitiv). Russian missiles targeted power facilities on Friday in Ukraine, with Ukrainian officials saying that a long-awaited Russian offensive was underway in the east."

According to the latest data from Ukraine’s agriculture ministry, grain exports so far this season are at 29.2Mt, down 28.7% on the year, noted​ the UK analysts.

Last week, the ministry called for increased minimal tonnage of ships carrying grain and vegetable oil from the country, after accusing Russia of delaying inspections of ships carrying Ukrainian goods. On Thursday, it was reported that a queue of 108 vessels formed in the Bosphorus due to the slowdown in inspections, something to watch moving forward, they added.

Maize markets

Global maize markets followed the upward movement in wheat markets last week, commented the AHDB team.

Maize prices were also supported by the ongoing dry weather in Argentina, and the larger-than-expected cuts to production estimates in the latest WASDE.

Looking over the next seven days, while rains are forecast in northern regions of Argentina, the southern parts of key agricultural production regions are still not forecast any rain, which could see some support for prices, they said. 

Barley prices continue to follow trends in the wider grains complex.

Rapeseed prices

Turning to oilseed market trends, and rapeseed prices will continue to track soybean and crude oil sentiment short term, they believe. “Long term, the record soybean crop from Brazil has the potential to pressure prices.”

Unfavourable weather in both Argentina and Brazil over the next week has the potential to support soybeans. Long-term we still have a record South American soybean crop, regardless of Argentina’s crop revisions, reads the report.

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