SovEcon: Russian and global grain market news – February 5, 2024

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

On Friday, U.S. wheat prices closed in the red. The March SRW contract fell to $6.00/bu ($220/mt; -0.3% compared to Thursday). Euronext wheat prices rose to €213.25/mt ($230/mt; +0.4%). U.S. corn dropped to $4.43/bu ($174/mt; -1.0%).

The strengthening of the dollar applied pressure on U.S. prices and supported European wheat. Following a better than expected U.S. jobs report, the DXY index closed at 103.92 on Friday (+0.8% from Thursday). The relatively good condition of crops in Argentina influenced corn prices.

Analytical center Kpler reports that approximately 700,000 tons of grain were rerouted last week to avoid the Suez Canal amid Houthi attacks. Since late December, about 4.5 million tons of grain, predominantly U.S. soy and French wheat, have been transported via alternative routes.

Turkey’s Foreign Minister Hakan Fidan announced on Sunday that President Recep Tayyip Erdogan will discuss a new mechanism for exporting Ukrainian grain through the Black Sea during an upcoming visit to Turkey by Russian President Vladimir Putin. The meeting between the two presidents is scheduled for February 12.

Ukraine’s Minister of Restoration, Oleksandr Kubrakov, reported that grain exports from sea ports in the Odessa region have reached 14.3 million tons since the launch of the Ukrainian grain corridor in August.

Over the weekend, Deputy Minister of Agriculture Michal Kolodziejczak announced Poland has implemented stricter controls on agri-food products at the border with Ukraine. He highlighted that a considerable amount of products, such as rapeseed and wheat, intended for transit through Poland to the Baltic states, ends up returning to Poland.

Two days before the Deputy Minister of Agriculture’s statement, Polish farmers from the Solidarity union announced plans to blockade border points with Ukraine starting February 9. Farmer protests continue in Belgium and the Netherlands, with strikes in Romania and France nearing completion amid progress in negotiations with governments.

The Food and Agriculture Organization (FAO) of the UN reported a 2.2% decrease in the cereal price index in January to 120.1 points. Analysts note a drop in wheat prices amid competition among exporters and the arrival of new harvests from the Southern Hemisphere. Corn prices also fell due to improved crop conditions in Argentina, according to the FAO.

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