European wheat prices are once again falling, this time below €225 per ton, thanks to abundant rainfall on American wheat fields. The latest rain has improved estimates of the harvest of good or excellent quality wheat to 29 percent, which is still a low figure in historical terms, according to the Croatian Employers’ Association in its analysis this week.
At the same time, negotiations between Ukraine and Russia regarding the extension of the grain corridor through the Black Sea remain uncertain. According to the words of the Russian Deputy Foreign Minister, the Russian side is still not satisfied with the progress made so far, which is an argument against any agreement in the near future. Moreover, the export of grains through the corridor has recently slowed down, which could be related to fears that ships will get stuck if the grain export corridor is closed. Even if wheat markets are currently well supplied, any suspension of Ukrainian exports would not be entirely irrelevant, given that it would initially be unclear how long the corridor would remain closed if negotiations fail.
The US Department of Agriculture estimates that Ukrainian exports still account for about 7 percent of global wheat exports in the 2022/2023 season. Therefore, there remains potential for an increase in wheat prices.
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