Wheat prices have experienced a global increase due to concerns surrounding the future of Ukraine’s grain export shipping deal, which is set to expire on Monday. Additionally, soybeans and corn prices have risen as a result of worries about hot and dry weather conditions forecasted in the grain belts of the United States and Canada. The recent 15-month lows in the value of the dollar have also contributed to the upward trend in prices, as it has made US supplies more affordable in export markets. In an effort to extend the deal allowing the export of Ukrainian grain from the Black Sea, the European Commission is collaborating with the United Nations and Turkey and is open to exploring all possible solutions.
Matt Ammermann, the commodity risk manager at StoneX, highlighted that the fear of the Ukrainian safe-shipping deal not being extended, along with the weaker dollar, has provided support for wheat prices. Despite the general belief in the market that an extension may not occur, there has been a reaction to the headlines regarding the deal’s expiry. Russian President Vladimir Putin has stated that Russia plans to withdraw from the agreement unless its own demands are met. This development has shifted the focus towards the negotiations between Ukraine and Russia in the grains deal. Thu Lan Nguyen, an analyst at Commerzbank, emphasized the significance of these negotiations for wheat prices.
While there is some expectation of moderate rainfall in the coming days, it is forecasted to be followed by high temperatures that could offset the benefits of the rain, according to Mr. Ammermann. This weather pattern further adds to the concerns surrounding the grain markets and has contributed to the rise in prices. As a result, market participants are closely monitoring the situation in Ukraine and Russia, as well as the weather conditions in the US and Canada, to assess the potential impact on global grain prices.
In conclusion, the global wheat market has experienced an increase in prices due to uncertainties surrounding the future of Ukraine’s grain export shipping deal. The rise in soybeans and corn prices can be attributed to concerns about hot and dry weather conditions in the US and Canada. The recent weakness in the dollar has also supported prices, making US supplies more affordable in export markets. The European Commission, in collaboration with the United Nations and Turkey, is working to extend the deal and explore all possible solutions. However, the negotiations between Ukraine and Russia in the grains deal have become a focal point for the wheat market. Additionally, the weather forecast of moderate rain followed by high temperatures adds to the market’s concerns. Market participants are closely monitoring these factors to assess the potential impact on global grain prices.