US wheat futures traded 9.25c lower on Friday to finish last week down 21.5c on Chic Dec.
Several weeks of stability in the grain corridor have seen CBOT futures trade mostly within a $2 range since July however on Saturday Putin slammed the corridor shut following reported drone attacks in Crimea against its navy
Rains in the Midwest and Southern Plains last week with more on the forecast this week softened some of the bulls in the US as much of the agriculture belt remains in drought.
Argentina also enjoyed some rains late last week however not enough to relieve current deficits.
Australia’s East Coast is in for more rain over the next few days however the back end of the 8-day BOM forecast shows a much drier next few days which will be a welcome relief.
Russian wheat will now be cheapest EU region wheat with 12.5% FOB at 308-312 for Dec load. Aussie ASW FOB on Friday
The grains were expected to explode out of the gate after Russia condemned the joint export agreement, and they didn’t disappoint, with volume surging throughout and wheat leading gains at 50-60 cents higher initially in Chic and KC.
The rally has cooled only a bit into the morning hours, though the spot Dec Chic wheat contract held up at technical support to trade 45 higher.
Iraq is seeking wheat in a nominal 50k tonne tender and reportedly has 11 participants; the country has said they need to import 5 MMT of wheat in calendar 2023 and “at least two million” in the first four months.
Pakistan bought 385k tonnes of wheat in their international tender for up to 500k tonnes, at $373/tonne C&F for Nov-Dec shipment, likely from Russia.
Chinese buyers on Friday reportedly switched multiple optional origin, Oct- Feb soybean cargoes from the U.S. to Brazil, due to river water levels.
Russia suspended their participation in the Black Sea grain export agreement on Saturday, citing a Ukrainian drone attack on ports as the reason; the rest of the parties to the deal are pressing ahead with transit plans in place for 16 ships to leave today, and 12 of those reportedly having left without incident. However, a ship carrying 40k tonnes of wheat to Ethiopia has reportedly been trapped in a Ukrainian port since the development, and Russia’s news agency said they were ready to supply up to half a million tonnes of grain to poor countries in the next four months, with assistance from Turkey.
The situation is very fluid and talks are ongoing not keep shipments moving, and both sides are posturing to support their arguments for or against, and how the future will be determined.
Trade obviously very concerned and adding premium mainly to Wheat, which feels the biggest impact, but also to Corn and also Soybean oil and vegoils.
There seems to be a somewhat more defensive tone by the AM and have pared some of their sharp overnight gains.
Russian consultancy SovEcon estimated October grain exports at 4.85 MMT, up from 4.45 MMT in Sept, with wheat at 4.5 MMT vs 4.1 MMT in Sept.
Russian consultancy IKAR estimated 2023 wheat output at 87 MMT, down from a record 101 MMT in 2022, with ‘22/23 exports up 2 MMT to 50 MMT.
The Rosario Grains Exchange on Friday estimated that wheat production would total just 1.34 MMT in Argentina’s “core farming region”, down from 7.82 MMT last season due to drought, and the lowest in over a decade. Total production is seen at 13.7 MMT, down from 23 MMT last season.
Mpls wheat +35
KC wheat +41
Chic wheat +45
Matif wheat +12
Soybean oil +130