After a few weeks of prices floating either side of €340/t, futures market moved upwards following the withdrawal of Russia from the Black Sea corridor agreement last weekend.
Prices were slow to move, but they did lift in the early days of this week before tumbling again on Wednesday.
The history of trade over the past few days sums up recent sentiment. The December 2022 MATIF futures closed last Friday at €337.50/t, moved to €352.25/t at Monday’s close and to €357.75/t on Tuesday.
At the time of writing on Wednesday (noon), price had slipped back to €343.25/t following the announcement that Russia would rejoin the deal.
At the same time, the December 2023 price was €322.50/t, which is a €20/t difference.
While an extension to the UN-brokered Black Sea corridor deal seemed likely last week, Russia withdrew indefinitely from it over the weekend.
Then there were reports that insurers would no longer offer insurance cover to shippers for new cargoes out of Ukraine through the Black Sea corridor.
International pressure followed and a further announcement on Wednesday indicated that Russia was to return to the deal.
This was welcomed by the market, as there were already many ships loaded and awaiting passage out of the Black Sea. Russia continues to indicate that its own exports are being hindered by this deal.
Heavy rains continue to give cause for concerns over the quality of the wheat crop in Australia.
It seems that heavy rain is forecast to continue across southern and eastern regions, with continuing fears for its impact on grain quality.
Meanwhile, drought and late frosts continue to impact on wheat production in Argentina. Following previous output reductions, the Rosario Grain Exchange reduced its wheat output estimate from 15Mt to 13.7Mt last week, further tightening the outlook for global wheat supply.
Elsewhere in Argentina, recent rain could improve conditions for the recently planted maize crop, but total area is still expected to be back. Rain is also helping maize plantings in Brazil.
While the physical market is more resilient or less responsive than the futures, prices have still moved up somewhat on last week.
Nearby wheat is tending around €355 to €360/t, depending on the day, while barley is currently either side of €345/t.
Prices for November 2023 are also somewhat stronger this week, with wheat around €325/t and barley at €312/t.