SovEcon: Russian and global grain market news – February 16, 2024

Daily news and market insights from a leading firm focused on the Black Sea grain markets research

On Thursday, grain prices continued their decline. The March SRW wheat contract closed at $5.67/bu ($208/mt; -3.1% compared to Wednesday). Euronext wheat prices dropped to €206.00/mt ($222/mt; -0.7%). During trading, U.S. corn reached a new contract low of $4.17/bu and closed at $4.18/bu ($164/mt; -1.6%).

Prices were pressured by favorable weather conditions in South America and high estimates for ending stocks of U.S. wheat for the 2024/25 season.

According to the Buenos Aires Grain Exchange, Argentina’s corn crop conditions have improved beyond average levels due to this week’s rainfall. The share of crops in normal to excellent condition is estimated at 83%, up from 55% last year and above the 81% average.

At its annual Agricultural Outlook Forum, the USDA provided the season’s first estimates for U.S. grain production and ending stocks for 2024/25. Wheat production is forecasted at 51.7 MMT, with corn production at 382.2 MMT.

The estimated wheat ending stocks are 20.9 MMT, 1.4 MMT higher than the market analysts’ average estimate; corn stocks are predicted at 64.3 MMT, 1.6 MMT below the market estimates.

Strategie Grains has raised its global corn production estimate for 2024 by 0.4 MMT to 64.0 MMT within the EU. The forecast for EU soft wheat production has been lowered by 0.1 MMT to 122.6 MMT amid extensive autumn rains.

In an international tender, Egypt’s GASC secured 180,000 tons of wheat, with 120,000 tons from Ukraine and 60,000 tons from Romania. Ukrainian wheat was acquired at $218/ton FOB with a 270-day payment deferral, and Romanian wheat at $237/ton FOB (270 days). Russian wheat offers were set at $245/ton FOB (180 days) and $265/ton FOB (270 days).

The International Grains Council (IGC) has raised its global corn production estimate for 2023/24 by 4 MMT to 1.234 billion tons. The wheat production forecast remains steady at 788 MMT.

French agricultural unions AGPB and AGPM on Thursday called for action to restrict Ukrainian grain exports. That day, six associations of European farmers issued a joint call for the implementation of restrictive measures.

On Thursday afternoon, the city of Ochakiv in the Mykolaiv region came under artillery fire, local authorities reported on Friday. According to Mykolaiv region governor Vitaliy Kim, a port infrastructure facility was damaged.

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