Uncertainty about the extension of the “grain agreement” puts pressure on all market players.
The Ukrainian wheat market continues to function in conditions of uncertainty regarding the further validity of the “grain agreement”. It constrains trading activity and puts pressure on purchase prices in seaports and makes farmers to restrict their sales. Despite the optimistic mood of the UN to extend the “grain agreement” in March, the local market is rather nervous.
This increases the pressure on prices in the ports and leads to a significant decrease in the purchasing activity of traders in this direction. Now most of them are focused on the shipment of grain volumes already formed in the port areas. They prefer to suspend purchases due to low activity in concluding new contracts with importers.
Farmers still have a few weeks before the beginning of active spring work phase and prefer to keep their stocks and to wait firm decisions on “grain corridor” and price stabilisation.
Prices go down but offers are very limited
In the current environment, there is a further increase in shipments by alternative routes. It increases the imbalance between supply and demand and contributes to lower prices.
In particular, the purchasing prices in the ports for milling wheat and feed wheat at the end of last week were fixed within 215-225 and 210-220 USD/t CPT port, respectively. The maximum prices were announced by units. At the same time, intermediary companies announced lower prices depending on the terms of delivery. Farmers responded to the price decrease by restricting sales.