Futures markets continue to jump about. This was mainly in the €320 to €330/t range until the deal was signed on Friday for the controlled export of a quantity of Ukrainian grains through three Black Sea ports for 120 days.

The agreement caused markets to weaken and MATIF December wheat closed at €312.50/t on Friday last, the lowest weekly close since early March. However, markets picked up again this week and closed at €326.75/t on Tuesday.

Oilseed rape prices were also lowered by the agreement, plus improved prospects for soya in the US and increased plantings in Canada. However, they picked up again this week to close on Tuesday at €643.50/t for November and €611/t for November 2023.

The Black Sea deal now brings practical issues such as who will provide ships and insurance to move this grain? This will be sorted in time and the grain will come out.

Demand sentiment

If the high prices of recent months were negatively affecting demand, lower prices now appear to be helping again.

While the Black Sea corridor may provide increased access to grain, there are still serious concerns regarding overall global supply, especially for wheat.

There had been concerns on the demand side up to now, but these appear to be waning.

The question now is if demand is high, will supply be adequate?

Forecasting bodies continue to reduce their production estimates and last week the International Grains Council reduced its global grain production forecast by 3Mt, to 2,252Mt, for 2022/23.

This is predominantly related to reduced EU production numbers for wheat, barley and maize due to drought stress.

With supply deficits of wheat in parts of the world, it is expected that there will be stronger global demand for European wheat in 2022/23. So markets will be watching production numbers from EU and Black Sea harvests closely over the coming weeks.

Elsewhere, production numbers are also down for Ukraine, Argentina and Australia.

Native prices

Native physical prices remain largely similar to previous weeks, with considerable daily fluctuation. Imported maize price continues to soften and this is affecting barley in particular.

In most respects, the nearby old-crop market is finished, except for small, isolated quantities of wheat, which might get around €360/t.

New-crop wheat is similar to last week, varying around €345 to €350/t, depending on the day.

Barley is more erratic at €320 to €330/t, with maize now also at €330/t ex-port.