The Mintec Benchmark Prices [MBP] for Wheat Milling 11% DDP Rouen FR [Mintec Code: WROF] was assessed at €267.00/mt, down €5.00/mt week-on-week (w-o-w). The wheat market has been trading lower this week and market players believe this is due to optimism about the grain corridor renewal that is set to expire on 18th March. Also, Russian offers continue to hit the world market and market players believe it is the driving force for the weaker prices, and that price weakness could continue.
Overall, the market is optimistic about the extension of the Ukraine export corridor however, there is still some hesitation. A Mintec source said, “I think it will be extended. A well-known US agri company is already buying goods for the end of March in ports, this is a strong signal. Some are looking at the Panamax charter for the second half of April for sale to China.” A trader added, “it will be extended, there is no reason why it should not be.” The extension of the deal is crucial for global food security.
Meanwhile, the slow passage of vessels through inspections, and record prices for transhipment, continue to create issues for the Ukrainian agricultural sector. A Mintec source added, “it’s not only very difficult with the logistics, but also earnings are so minimal. Spring planting is approaching, for which not everyone has cash. A lot of winter grain still sits in the warehouses. If vessel checking would work at full capacity, grain exports could be 30-40% higher.” Ukrainian 2022/23 wheat export estimates are unchanged from the latest USDA data update, at 13.5 million mt, down 28.4% year-on-year (y-oy).
Also, there was limited demand this week according to market players. A Romania-based trader commented, “demand is very low in any direction you look. The only issue I see is on the French side due to protests – there is some delay in the Rhine River traffic.”
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