Russia to continue working on export deal

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After another geo-political driven week the US market is trading lower despite increased tension and the attacks on Ukranian cities and ports. Also USDA’s recent monthly update cut US wheat production as expected, but the fall in stocks was partially negated by increased imports, lower domestic usage and a decline in the export projection. Despite the increased tension in the Black Sea Russia has said it will continue working towards an agreement on a grain export deal as it is a “responsible supplier” of food as it prepares to boost exports in 2023. Reports are also coming out of Russia that it may stop its grain export duty for the second half of the season due to a bumper crop. Also Ukraine has now shipped over 6.5M tonnes of grain and foodstuffs from its Black Sea ports through the export corridor.

Global production

Global production predictions were also downgraded as declines in the US and Argentinian were only partially offset by higher EU and Brazilian output, resulting in a global stock projection of 267.5M tonnes, down 1.1M tonnes on the month. Drought and recent frosts have hit the Argentine wheat crop particularly hard and the Rosario Grain Exchange haw now estimated the 2022/23 crop at 16M tonnes with a warning that this could fall further if the current adverse conditions continue. Meanwhile in Brazil CONAB still estimates the 2023 wheat crop at a record 9.35M tonnes mainly due to a 11% year on year expansion in area and a 10% increase in yield.

Back in the UK, prices have remained almost flat, trading £1/t lower on the week, although volatility remains driven by global events and the fluctuation in sterling as the governments financial policy remains under scrutiny.

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