Bucking the downward trend, wheat saw some positive price action this week. Wheat, having hit 18-month lows, finally flushed out a few buyers with Saudi Arabia (1Mmt), Egypt (720kmt), Algeria (420kmt), and Tunisia (240kmt) all stepping up to the plate. The vast majority is likely to be of Black Sea origin (Russian mainly) however, Australian grain is also in the frame to win some of this business.
The Black Sea Grain Initiative is rapidly closing in on its deadline with all parties seeming to be squabbling over the duration of the updated agreement. Ukraine has clearly stated it would settle for 120 days (it originally wanted 365 days), and Russia is sticking to only offering 60 days. When the average clearing rate for a vessel leaving the Ukrainian port of Odesa is roughly 5-6 weeks due to slow inspection times, it leaves plenty on the table when it comes to the security of delivery. Negotiations continue but the general consensus is that the corridor will continue in some form or another.
In the past couple of days, global economies have been rocked by the news of several large banks foreclosing. The largest of these, Credit Suisse was teetering on the brink but is believed to have had an 11th-hour reprieve of a $100B loan. Crude oil, as an economic health indicator, slipped below US$75/barrel before staging a small bounce overnight. Now we can add macroeconomics to the raft of price influences in the same basket as geopolitics, managed money, and the fundamentals.
Expect the weather to have more influence on market direction over the next couple of weeks. The USDA estimates that 55% of the US Hard Red Winter (HRW) is experiencing some kind of drought. The current forecast continues to show the exact areas that need the rain will miss out. Expect this to become a bigger issue as the temperature warms up (assuming no reprieve in rainfall).
Agricultural powerhouses of France and Germany, both received widespread rain in the past week, kickstarting their Spring growth nicely. With crops breaking dormancy, further rain will be critical to make up for the winter deficits.
The week ahead….
The wheat market will take its immediate direction from the decision around the grain corridor. Assuming the corridor is renewed, we doubt that the market will fall too much, but it may unwind the gains seen in the past week.
Grain and oilseed markets are showing some good old-fashioned spring (in the northern hemisphere) volatility. We know that springtime dryness can grow into real production
Another week, another very mixed result. Last week, Middle Eastern politics drew the market’s attention, this week it’s all about the weather. Russia looked to
The worm seems to have turned somewhat in the grain and oilseed complex. While there is some short-term support coming from yet more geopolitical unrest,
Independent analysis and outlook for wool, livestock and grain markets delivered to you as it’s published
Listen to the podcast
Join the Mecardo team for the Commodity Conversations podcast, where we provide short weekly market recaps and longer conversations with guests to discuss the drivers and trends in livestock, grain and fibre markets.
In this report for LiveCorp and MLA, we analysed the historical trends in the demographics of the Australian sheep flock, examining domestic factors that influence farm-level enterprise decision making.
We don’t just bring you the most up to date market insights. Find out more about Mecardo’s services including risk management advisory, modelling, benchmarking, research & consultancy.
Bargain buying arrests the slide
The Black Sea Grain Initiative is rapidly closing in on its deadline with all parties seeming to be squabbling over the duration of the updated agreement. Ukraine has clearly stated it would settle for 120 days (it originally wanted 365 days), and Russia is sticking to only offering 60 days. When the average clearing rate for a vessel leaving the Ukrainian port of Odesa is roughly 5-6 weeks due to slow inspection times, it leaves plenty on the table when it comes to the security of delivery. Negotiations continue but the general consensus is that the corridor will continue in some form or another.
In the past couple of days, global economies have been rocked by the news of several large banks foreclosing. The largest of these, Credit Suisse was teetering on the brink but is believed to have had an 11th-hour reprieve of a $100B loan. Crude oil, as an economic health indicator, slipped below US$75/barrel before staging a small bounce overnight. Now we can add macroeconomics to the raft of price influences in the same basket as geopolitics, managed money, and the fundamentals.
Expect the weather to have more influence on market direction over the next couple of weeks. The USDA estimates that 55% of the US Hard Red Winter (HRW) is experiencing some kind of drought. The current forecast continues to show the exact areas that need the rain will miss out. Expect this to become a bigger issue as the temperature warms up (assuming no reprieve in rainfall).
Agricultural powerhouses of France and Germany, both received widespread rain in the past week, kickstarting their Spring growth nicely. With crops breaking dormancy, further rain will be critical to make up for the winter deficits.
The week ahead….
The wheat market will take its immediate direction from the decision around the grain corridor. Assuming the corridor is renewed, we doubt that the market will fall too much, but it may unwind the gains seen in the past week.
Have any questions or comments?
Click on graph to expand
Click on graph to expand
Click on graph to expand
Data sources: Reuters, Refinitiv, USDA, Atria Brokers, Next Level Grain Marketing, Mecardo
Categories
Have any questions or comments?
Getting good prices while avoiding volatility
Grain and oilseed markets are showing some good old-fashioned spring (in the northern hemisphere) volatility. We know that springtime dryness can grow into real production
Time to cut the BOM some slack
Another week, another very mixed result. Last week, Middle Eastern politics drew the market’s attention, this week it’s all about the weather. Russia looked to
Moving in the right direction
The worm seems to have turned somewhat in the grain and oilseed complex. While there is some short-term support coming from yet more geopolitical unrest,
Geopolitics and shorts weather
Amazing the difference a week can make. It all started last Friday morning, with continued escalations in the Middle East. The wheat market jumped 20
Want market insights delivered straight to your inbox?
Sign up to the mailing list to get regular updates to new analysis and market outlooks
Independent analysis and outlook for wool, livestock and grain markets delivered to you as it’s published
Listen to the podcast
Join the Mecardo team for the Commodity Conversations podcast, where we provide short weekly market recaps and longer conversations with guests to discuss the drivers and trends in livestock, grain and fibre markets.
Research: Analysis of the Australian sheep flock
In this report for LiveCorp and MLA, we analysed the historical trends in the demographics of the Australian sheep flock, examining domestic factors that influence farm-level enterprise decision making.
SERVICES AND CAPABILITIES STATEMENT BROCHURE
We don’t just bring you the most up to date market insights. Find out more about Mecardo’s services including risk management advisory, modelling, benchmarking, research & consultancy.