SovEcon: Russian and global grain market news – January 29, 2024

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

On Friday, grain prices saw a sharp decline. The March SRW contract closed at $6.00/bu ($221/mt; -2.1% compared to Thursday). March French wheat dropped to €214.75/mt ($233/mt; -1.6%). The March corn contract finished at $4.46/bu ($176/mt; -1.2%).

The decline in wheat prices could be attributed to funds opening short positions. On Friday, open interest (OI) in the March SRW wheat contract increased from 188k contracts to 192K.

Additional pressure may have come from reports of a strong wheat and corn crop in Argentina.

On Friday, Houthi forces launched an attack on a tanker transporting Russian oil in the Red Sea. This marks a shift from Houthis’ previous restraint towards such tankers. The attack could lead to a decrease in traffic and an increase in freight rates through the Suez Canal, potentially bolstering oil prices.

The Argentine government announced on Friday that Chinese customs has approved Argentine companies as wheat exporters. This follows last fall’s agreement between Argentina and China on export protocols for several products, including wheat.

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