Grains prices are retreating — ASAP Agri
The enthusiasm of the last few weeks has been somewhat dampened by the recent russian strikes on the port infrastructure of Chornomorsk and Pivdenny. Corn is certainly the cereal most impacted by the drop in prices, now trading on a CPT-basis between 200 and 203 USD compared to 210 during the past week, Olivier Bouillet, the Head of Analytics & Insights at ASAP Agri, told Latifundist.com.
The reasons are multiple:
- increased freight costs from Ukrainian ports since the recent russian strikes;
- use of war risk insurance;
- subdued demand, particularly from China, against a backdrop of seasonal competition with Brazil.
"Also, it shouldn’t be forgotten that the Ukrainian physical market was recently in backwardation, with delayed loadings (November) being contracted at a lower price than spot ones (October). This was like a signal that Spot was somehow overheated," the analyst marks.
Feed wheat is following the same behaviour as corn, meanwhile milling wheat prices are demonstrating more resilience and tend to stabilize.
At the same time, global markets have turned red, especially after the release of the WASDE report. Corn futures are testing the 4$/bu level and soybeans ones have already broken down the 10$/bu support. Global and Ukrainian markets look ready for some stabilization.
