Volatility in grain markets is expected to continue in the near term, as no resolution to the war between Russia and Ukraine is in sight.

The outlook for global grains continues to look tight, keeping prices at historical highs.

Last week, the International Grains Council (IGC) reduced its global trade projections for wheat (down 3.0 million tonnes [Mt]) and maize (down 6.0Mt) for this season, due to the conflict between Russia and Ukraine.

With high prices, demand rationing is expected too. Large cuts were made to Ukraine’s maize exports (down 10.8Mt).

As of mid-March, most of Russia’s ports were reportedly operational, though there are some restrictions on the Azov Sea, as well as financial restrictions, according to the UK's Agriculture and Horticulture Development Board (AHDB).

Drought

Drought in the US southern great plains is becoming a concern amid the implication of this on US winter wheat. Despite an ongoing wet spell, most of April is forecasted dry (Refinitiv).

United States Department of Agriculture (USDA) export sales were mixed to the week ending 10 March.

US net sales for wheat totalled 145.9 thousand tonnes (Kt) for 2021/22, primarily to Colombia and Mexico. This was below trade expectations and may be a sign of demand rationing.

US maize exports totalled 1.84Mt for 2021/22, primarily to Japan and unknown destinations. For 2022/23, net sales were made of 204.0Kt to China, both above trade expectations.