Getreide News, 07/21/2023

On the grain markets, the trade week was dominated by the termination of the grain agreement for Ukraine. At the beginning of the week, the dissolution itself caused only few reactions on the market, although both buyers and sellers were cautious. However, the Russian attacks on Ukrainian seaports, such as Odessa, and the laying of new sea mines drove prices above the 250 euro/t mark. Yesterday, Thursday, the front month of September on the Euronext/Matif closed at EUR 255.75/t after a volatile trading session. This means that September wheat has increased by 24.75 euros/t since last Friday until yesterday evening. Maize in the most traded November contract rose from 228.25 euros/t last Friday to 248.00 euros/t yesterday, Thursday and thus increased by almost 20 euros per tonne. Most market participants had expected the grain agreement to expire. But it was also often heard that, as with the first overtime, the break should only be short-lived. The most recent attacks on the Odessa export port show that this is not the case. Russian drones and missiles hit and destroyed important port infrastructure here, including grain elevators and cranes.According to the Ministry of Agriculture in Kiev, around 60,000 tons of grain were destroyed in the attacks. Although President Zelesky spoke of allowing the ships to continue sailing, this is questionable. It is reported that Russia is again laying more and more sea mines in the Black Sea. However, the Turkish President said that it was impossible for Turkey to let ships go to Ukraine in this situation. Although the Ukraine is already transporting large quantities by rail and road, the question in the market remains how high the capacities can be without a sea route. In addition to the situation surrounding Ukrainian exports, weather reports in particular play an important role. While the USDA raised spring wheat condition ratings Monday, warm and dry weather conditions, particularly in Kansas and Minneapolis, continue to be reported. It is also currently dry on the Canadian prairies and there has been little rainfall recently. The winter wheat harvest is also lagging behind the average pace. However, weak export figures continue to put a damper on prices in the USA.Overall, US exporters often lack competitiveness, even if the dollar has recently weakened. In a new forecast yesterday, the International Grain Council reduced its global production estimates by 2 million tons and is now expecting a harvest volume of 784 million tons for the current marketing year. On the other hand, Russian consulting firms such as Sovecon in IKRAR have increased their forecasts for the Russian harvest. In some regions of Europe, the wheat harvest has already begun. In southern and south-eastern Europe, the stocks have suffered significantly from the warm temperatures and also from the current heat wave that is prevailing there, and there are reports of high crop failures. So far, there have been very different harvest reports in southern Germany. Trading takes place on the local cash markets, but the quantities are manageable, in many cases buyers and sellers are waiting for the current developments and are cautious. Corn development in the USA continues to be influenced by weather data. Doubts are increasingly being raised about the USDA forecast from the WASDE report. Rain showers have often brought relief. As of 18.7. 55% of fields in the US are considered to be affected by drought.Although that is 9 percent less than in the previous year, it is still significantly large stocks. With the drought that is currently predicted, the corn futures in Chicago recently reacted rising on a weekly basis. However, profit-taking weighed heavily on yesterday, Thursday in particular. Rather weak export sales also weighed on the mood.