The move higher in Mpls continues to be a function dry weather forecasts for Canadian and US spring wheat areas as well as The Black Sea Corridor concerns
The last few days have shown both Russia and Ukraine trying to demonstrate they can exert control over the Black Sea with Russia attacking Snake Island and Odesa, and Ukraine counterattacking Sevastopol in Crimea.
Early harvest reports in Ukraine and Russia show a higher proportion of feed wheat likely which has seen protein spreads start to widen across CVB ports from €2-4/mt to €8/mt close of week.
Wheat prices are higher this morning led by Chicago on short covering.
The grains rallied out of the gates overnight as Russia followed through on their threat to withdraw from the Black Sea export deal. Their rhetoric was fairly consistent ever since the most recent extension of the agreement, still looking for more aid for their own grain and fertilizer exports.
It remains to be seen if Ukraine can find a suitable workaround to replace much of that seaborne business
33 MMT of grains have been shipped under the pact thus far.
On the U.S. side, plenty of trade concerns remain over the state of 2023 row crops; condition ratings should improve again this afternoon but rains are starting to dry up a bit once again, with forecasts trending warmer and drier now up into the end of the month.
The calendar flipping to August will bring more concern for the state of the soybean crop as well, with basically any yield reductions off what is essentially a record forecast by the USDA resulting in further tightening of the 2023/24 balance sheet.
Bangladesh issued an international tender for 50k tonnes of milling wheat this morning, optional origin for Aug-Sept shipment; their last reported wheat tender came in September 2022.
China’s government reported a 1% decline in summer wheat production this season, to 134.53 MMT, the first decline in seven years due to heavy late rain; acreage increased slightly but yields were down 1.3% year over year.
Mpls wheat +13
KC wheat +16
Chic wheat +18
Matif wheat +3
Soybean oil +80