Volatility is still expected in wheat markets short term, as the March 19 deadline looms for the Black Sea Initiative renewal, said that team.
“Ukraine is reportedly asking the UN and Turkey to start talks with Russia, with Ukraine looking to extend the deal for at least one year and to include the ports of Mykolaiv. It is understood markets anticipate a renewal of the initiative, as the most likely scenario.”
Though the detail will be important, they noted, in relation to how long it is extended for, and whether there will be extra ports added, and whether vessel inspection will be speeded up.
Wheat prices started this week as they ended the last, in retreat, weighed by growing optimism over the renewal of that corridor, according to CRM Agri in its review of the markets, released yesterday.
Last week saw a further drop in Russian wheat export prices.
Chicago wheat futures for May 2023 fell to their lowest since May 2021, against a backdrop also of a dollar which remains close to a seven-week high, while UK feed wheat and Paris milling wheat remain above their January lows.
US wheat export data is encouraging, though, with shipments for last week at 592Kt, up from 374Kt the week before, said CRM Agri team.
Dry conditions in Argentina
Chicago corn for May 2023 fell as well, by 0.8%, against a mixed South America picture. While dryness remains a worry in Argentina, sowings of Brazil’s safrinha crop have accelerated, they said.
Last week saw the USDA hold its annual Agricultural Outlook conference, with the first forecasts for harvest-23. “Although the official USDA Prospective Planting won’t be released until the end of March, the conference’s outlook is recognised as an important early guide for harvest-23. Estimated at 91M acres, the USDA’s estimate for US corn plantings this year exceeded market expectations,” said the CRM Agri commodity market specialists.
Chicago soybeans for May 2023 fell by a lesser 0.4%, supported by Argentina’s drought, reflected too in small gains for soymeal futures. Soyoil, weighed by crude oil, dipped by 1.3%, prompting Paris rapeseed futures to give back most of their early gains.
Oil markets overshadowed other commodities in falling despite Russia stoking supply jitters by stopping supplies to Poland through the Druzhba pipeline, reported those analysts. Brent crude stood 1.3% down in late trading.