Market report: markets still reactive to Black sea events

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According to the latest AHDB reports global grain markets felt some pressure last week as competitive Black Sea supplies continued to weigh down on the market, US crop conditions improved, and demand for US maize turned sluggish. As global prices fall lower, we have seen global tenders come through for state buyers for Egypt and Jordan.

Yesterday, in its weekly crop progress report, USDA rated 28% of the US winter wheat crop in good-excellent condition. This was up 2% from the previous week, after some much needed rain across the US plains. However, according to Refinitiv, this rating remains amongst the lowest on record at this point in the season.  With up to 2 inches of rain is forecast in Kansas and Oklahoma in the next 7 days (two key wheat producing states), we could see further improvement to the crop.

On Friday, it was reported that Poland, Hungary, Slovakia and Bulgaria are to lift the ban that they had imposed on Ukrainian grain imports, under a deal reached with Brussels on Friday. The European Commission will impose temporary curbs on a more limited range of Ukrainian products, as a way of protecting the countries’ farmers. Certain grains and oilseeds will only enter into Poland, Hungary, Slovakia, Bulgaria and Romania when in transit to other destinations (Financial Times).

Over the next couple of weeks, global grain markets will remain reactive to any news on the future of the Black Sea Grain Initiative, as the expiration of the deal is fast approaching. The Russian Foreign Ministry maintained their stance on Thursday, saying that Russia does not consider the export corridor deal to be satisfactory. Any further information on the deal will be important for market movement this week, talks are expected between all parties tomorrow (Refinitiv).

Last week, China cancelled US maize cargoes raising doubt over export potential moving forward. Demand for US maize has been weak so far this season, with the USDA predicting US maize exports at 47Mt in its latest supply and demand estimates, down 25% from last year. Cumulative sales up to 20 April were down 33% this season to date from last. It’s likely that the cancelled US shipments will be replaced by cheaper Brazilian supplies coming online in a couple of months, something to watch moving forward.

UK Markets

Old crop UK feed wheat futures (May-23) ended the week down 1.4% (Friday-Friday). New crop futures (Nov-23) saw greater losses on the week, down 3% over the same period. Domestic futures followed global price movements down last week.

Domestic delivered prices followed futures movements (Thursday to Thursday). Feed wheat delivered into East Anglia (for May delivery) was quoted at £192.50/t on Thursday, down £6.00/t on the week.

Bread wheat delivered into the North West (for May delivery) was quoted at £276.50/t, down £1.50/t Thursday to Thursday, as milling premiums hold firm.

Feed barley into East Anglia for May delivery was quoted at £179.00/t, down £0.50/t over the week.

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