Global maize (corn) and wheat prices softened slightly over the last week of May due to the optimism over talks between Russia, Turkey, and Ukraine to open ‘grain-export corridors’ via Black Sea ports. The Euronext maize price fell by 3.3% week-on-week (w-o-w) to EUR 353/MT, while the maize price on the Chicago Board of Trade (CBOT) decreased marginally by 1% w-o-w to USD 291/MT on the 27th of May 2022. The Euronext wheat price fell by 2.5% w-o-w on the 25th of May 2022, to EUR 417/MT.
Prior to the Russia-Ukraine war, Ukraine used to export approximately 98% of its grains (wheat, maize, barley) and oilseeds via the Black Sea, up to 6 million tonnes per month. Currently, with the ports being blocked, the railway system is capable of transporting relatively small volumes, approximately 1-1.5 million tonnes of grains a month. In addition, Ukraine has a shortage of grain storage units; approximately 36% of Ukraine’s total storage capacity of 61 million tonnes could be used up by the old 2021 crop until the new harvest arrives in July. However, for the ‘grain corridor’ deal to happen, there are many hurdles, including Russia’s request for the removal of the financial sanctions and the damage to ports and infrastructure in Ukraine.
Nonetheless, the ‘grain corridor’ deal would be a notable relief to supply conditions in the grain markets, and if the exports via the Black Sea resume, grain prices could ease further.
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