SovEcon: Russian and global grain market news – May 08, 2024

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

On Tuesday, grain futures declined. The July SRW wheat contract closed at $6.43/bu ($236/mt; down 0.9% compared to Monday). The September Euronext wheat contract fell to €242.75/mt ($261/mt; down 1.0%). The July U.S. corn contract closed at $4.67/bu ($184/mt; down 0.4%).

Flooding in the Brazilian state of Rio Grande do Sul has impacted port and agricultural infrastructure, Reuters reported, citing several representatives of the country’s agricultural associations. According to sources, the flooding affected grain storage facilities near the Rio Grande river and disrupted access to the state’s port.

The upcoming WASDE report on Friday will publish the first balances for the 2024/25 season. Market participants expect the assessment of U.S. ending stocks to be above the current season’s level and global stocks to be on par with this season. Estimates for U.S. wheat ending stocks are 21.4 MMT (up 2.4 MMT from the USDA’s April estimate); for U.S. corn, 58.0 MMT (up 4.7 MMT). Analysts believe that the estimate for global grain stocks will be close to the USDA’s April assessment for the 2023/24 season.

Analysts forecast that U.S. grain stock estimates for the 2023/24 season will remain unchanged, while global stocks may decrease. Wheat stock estimates might drop by 1.4 MMT to 256.9 MMT, and corn by 3.6 MMT to 314.7 MMT.

The Russian Ministry of Agriculture has redistributed part of the additional grain export quota, according to an order published on May 6. According to the order, the company “Rodnye Polya” (formerly TD “Rif”) relinquished a 1.2 MMT portion out of 4.0 MMT, and “Louis Dreyfus Vostok” relinquished its entire 0.2 MMT quota. The quota for “Grain Greats” was increased by 1.9 MMT to over 6 MMT.

The Egyptian company GASC will hold a tender on May 8 for the supply of wheat with a 270-day payment deferral.

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