The Mintec Benchmark Prices [MBP] for Wheat Milling 11% DDP Rouen FR was assessed at €332.00/mt, up 1% week-on-week (w-o-w). The wheat market continues to be supported by rising corn (maize) prices. The grain corridor deal continues with more grain leaving Ukrainian ports, although there are talks that the deal might be stopped after the 19th of November 2022.
Since the implementation of the grain corridor agreement, in total, 106 vessels (as of the 8th of September) have departed from Ukrainian ports to 19 countries, carrying 2.43 million tonnes of grains and oilseeds. On the 4th of September, 13 vessels departed the ports of Odesa, Chornomorsk and Pivdennyi, this is the biggest group of ships since the beginning of the implementation of the agreement. According to a Mintec source, ‘’There could be more exported this month with the current pace, I would say perhaps 3.0-3.5 million metric tonnes”. If Black Sea grain export does not increase, it will add upside price risk to European wheat prices.
However, President Putin claimed at the Eastern Economic Forum that, “Ukraine does not export grains to the countries which desperately need it but instead to the EU”. He stated, “Only 2 vessels of grains had been sent to developing countries and that perhaps there should be restrictions on the grain corridor deal”. According to Ukrainian Grain Association, there are more than 15 vessels carrying 638 tonnes of wheat and corn, that have arrived in Africa and the Middle East nations since the deal was signed. Perhaps the dilemma lies within Russia itself, which is struggling to export grains as there is no line of credit or shippers to take the goods. Nevertheless, demand might increase over the next few weeks as Russia has decreased its grain export tax once again. If Russia decides not to extend the grain corridor agreement with Ukraine, the grain market sentiment could be bullish in the coming weeks. Without such an event, wheat prices are expected to be rangebound to higher, driven by seasonality in the coming weeks.
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