The Mintec Benchmark Prices [MBP] for Wheat Milling 11% DDP Rouen FR was assessed at €327/mt, up 2% week-on-week (w-o-w). The wheat market remains supported following last week’s concern about the grain corridor’s future, the ongoing dryness in Argentina and possible reduced fertiliser application due to high prices.
Last week President Putin criticised the grain corridor deal, stating, “Ukraine does not export grains to the countries which desperately need it but instead to the EU”. As of 16th September 2022, 150 vessels have departed Ukrainian ports, 3.34 million tonnes of grains and oilseeds, out of which over 30% of vessels have gone to lower-to-middle income countries. Presidents, Putin and Erdogan, will meet in Uzbekistan on 15-16th September to discuss and amend the UN-backed Black Sea grain corridor deal before the current deal runs out in November. Overall, the market is concerned and cautious about what the meeting could conclude. One Mintec source noted, “The deal will probably be extended, but it’s politics, so you never know”.
The adverse weather condition in the major global wheat exporter Argentina has led to reduced wheat production and export estimates for the 2022/23 season (11 million metric tonnes, -21.2% y-o-y), a Mintec source added, “The lack of rain, together with high temperatures and then frost, will likely lead to lower protein levels in the crop. The northern region crop is reported to be over 60% in fair-to-bad condition”. Argentina’s wheat crop is currently at key development stages, with the harvest set to begin in November; thus, the weather remains a key watch-out factor.