Futures markets strengthened for much of last week to close almost €20/t up last Friday relative to the previous Friday.

Markets remained quite volatile, but closing positions trended upwards for most of last week, despite the agreement to move grains out of Ukraine.

This was mainly driven by weather conditions that seemed likely to hamper production in the EU and the US.

However, the announcement that ships were sailing out of Odessa caused markets to weaken again on Monday and markets closed on Tuesday at €326.50/t compared with €331.75/t last Friday evening.

The fact that insurance on ships operating in the Black Sea will be very costly begs the question as to whether these or other ships will actually travel to Ukraine to collect grain.

The ships currently coming out have been marooned in these ports for months and so one can understand an eagerness to take on a risk to get them out.

But will they or others return? Markets are working on the basis that grain will continue to move out of Ukraine, but will it?

While a few ports are to be allowed to operate for now, another port city, Mykolaiv, is being heavily shelled.

For these reasons, price volatility is likely to continue for now.

Maize

A few weeks ago markets were bearish on maize because of the high production numbers expected from South America.

Now, overall maize supply seems to be tightening following the hot and dry weather in many parts of the EU, where production is now estimated to be below the five-year average.

The reduced EU estimate is associated with heat stress in France, Italy and Romania in particular. Weather in the US is also being watched closely, as maize crops there are at the critical flowering stage.

European wheat

Strong global demand continues to support European wheat markets, as buyers attempt to source supplies that might normally have been supplied through Black Sea trade.

Dry conditions are also a worry for wheat as the early harvest in Hungary has seen yields there reduced by 25%.

Native prices

Physical prices here remain broadly similar to last week. The nearby market is now all but finished as new-crop product becomes available.

November wheat remains around €345 to €350/t, while barley for November remains about €15/t under wheat at €330 to €335/t.

Imported maize is slightly stronger this week, with nearby being quoted at €335/t ex-port while November is now closer to €325/t.