The Mintec Benchmark Prices [MBP] for Wheat Milling 11% DDP Rouen FR was assessed at €352.50/mt, up €1.50/mt week-on-week (w-o-w). The wheat market reacted strongly following the escalation of the Russia-Ukraine conflict over the weekend and early this week.
This week Ukraine has had several missile attacks from Russia across major cities, in response to the Kerch bridge explosion connecting Russia to the occupied Crimean Peninsula. Kerch bridge played a vital supply and logistics route for Russian forces in Ukraine. Following the bridge explosion, Russia carried out its most widespread missile strikes since the war started. There are increasing concerns regarding the continuity of the Ukrainian grain corridor deal, which expires on 19th November 2022. A Mintec source noted, “I have very low confidence that the grain and oilseed vessels will continue leaving the Black Sea ports”. Another Mintec source added, “There’s a 50:50 chance of extending the grain corridor deal, and the market isn’t acting as though everyone believes it will be extended”. Presidents Putin and Erdogan met in Kazakhstan on 12-13th October, hopefully, to discuss the deal’s extension. Thus, for the time being, the total exportable surplus and the volumes of wheat that will eventually be shipped out of the Black Sea will be the major deciding factor for wheat prices going forward.
As of 14th October, 331 vessels have departed Ukrainian ports (Odesa, Chornomorsk and Yuzhny) since the grain corridor deal was signed, carrying 7.36 million metric tonnes of grains and oilseeds. Though, according to a Mintec source, “The pace of vessels is very slow; there are currently longer outbound inspection times, on average close to two weeks”. On 10th October, there were 97 vessels in the queue for the outbound inspection, and nearly 120 vessels were waiting last week. Ukraine is seeking to export as much grain as possible to be able to store newly harvested crops in the grain silos. As of 10th October, winter wheat planting in Ukraine was 41% complete, with 1.6 million hectares.