Grain markets have remained volatile over the past week as concerns over the longevity of the Black Sea grain corridor supported prices, due to an escalation of conflict between Russia and Ukraine.
That said, prices trended lower towards the end of the week as demand prospects continued to deteriorate amid a slowdown in US export sales.
US corn and soybean prices ended the week where they started, while US wheat prices trended lower. Similarly, European corn and rapeseed markets were relatively unchanged in recent days, but Paris milling wheat and UK feed wheat prices both declined.
The grain corridor deal is set to expire in November and given the recent escalation in conflict between Russia and Ukraine, and Russia voicing their concerns about the agreement, most analysts anticipate the deal will not be renewed next month, which has helped support corn and rapeseed prices.
Nevertheless, we still expect some sort of arrangement to keep the grain corridor in place given its significance to global food security and Russia’s need for additional sources of income to fund its war. To find out more about how recent developments in the war are impacting markets read our weekly grain outlook report.
Meanwhile, Managed Money reduced their long positions in corn, wheat and soybeans over the past week, which has helped bring down prices. After several weeks of increasing long positions last week’s sell-off may represent a shift in sentiment should it continue.
Furthermore, US export sales data for the past week was far from encouraging and washed away gains in prices due to the war in Ukraine. Wheat, corn and soybeans exports slowed significantly over the past week raising concerns over the global demand outlook for grains.
Lastly, OPEC+ decided to cut oil production in November by 2 million barrels per day at its meeting this week. This helped support crude oil prices, but given the fact that most OPEC producers are not hitting their production quotas at the moment means the actual cut to production will be much lower than the headline figure. The cartel decided the global economy is softening with a notable risk of recession ahead, which risks hampering crude oil demand ahead.
Highlights: • Rapeseed - New crop rapeseed outperforms in volatile market • Soybeans - Prices revive, despite rapid US sowings • Crop Watch - Australian and Canadian dryness
Report Highlights: • Wheat - Prices gain, as supply outlook tightens a notch • Corn - EU, export price signals challenge supply complacency • Crop Condition & Weather - Australian and Canadian dryness