The Mintec Benchmark Prices [MBP] for Wheat Milling 11% DDP Rouen FR [Mintec Code: WROF] was assessed at €242.00/mt, down €15.00/mt week-on-week (w-o-w). At the beginning of the week, the market was rather muted, awaiting the response to the final old-crop-focused USDA estimation report. There were no major supply and demand alterations for the wheat market; thus, the update did not result in major market reactions. According to market players, the market is focused on the new crop conditions for the next season. Nevertheless, the global wheat market continues to be pressured by competitive Black Sea supplies and ample supply from Russia and Australia. The announcement of reduced global oil production and new fears of a recession, and the withdrawal of several Western grain traders from Russia in the coming months, also briefly caused uncertainty on the stock exchanges.
In mid-week, there was market information that Russia had stopped the grain corridor deal, as no ships were inspected on Tuesday (11th April). Market participants stated that there was a violation of the grain corridor rules, because the names of the vessels were given by the Ukrainian side but were not inspected by their Russian counterparts. Thus, this created short-term panic in the market as a violation of the grain corridor rules could mean termination of the grain corridor deal, potentially driving the prices of grain higher. In addition, Russia repeated threats to suspend the deal if the requirements to lift sanctions that are hampering its payments system are not lifted. In the latest press conference, Russia’s Foreign Minister, Sergei Lavrov, said, “Western colleagues do not get tired of repeating, despite the facts well known to them, that neither fertilisers nor grain fall under the sanctions lists, but everything else appears - disconnection from the SWIFT system, the ability to insure and reinsure cargo under normal conditions, and the ability for Russian ships to call at Mediterranean ports and for foreign ships at Russian ports, and much more.” According to market participants, the vessel inspection on Russian counterparts resumed on Wednesday (12th April), yet the vision of the grain corridor future remains unclear. As mentioned in the previous market update, the grain corridor deal should be reviewed again on 18th May. Meanwhile, uncertainty is creating volatility in the market in the short term.
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