Export problems keep grain market moving

The trade on the grain market remains unsettled. After the sharp rise earlier this week, we saw a correction in the last trading session. However, the underlying problems with grain exports from the Black Sea region are anything but resolved. In Europe, too, the wheat harvest was not a standout, as confirmed by new figures from Germany. After the jump on Tuesday, the September wheat contract on the Matif gave back €1 yesterday to €244,25 per tonne. The December contract, which is traded most actively, did rise by €3,25 to €256,75 per tonne. On the CBoT, wheat lost 9¼ cents to $7.54¾ per bushel. Corn closed 2¾ cents lower at $5.18¾ per bushel. Soy closed 5 cents lower at $13.01¾ per bushel. Volatile, that is how we can rightly call the grain market this week. Concerns about exports via the ports of Ukraine and Russia on the Black Sea are increasing. The Ukrainian farmers' association UAC said this week it expects the Ukrainian port around Odessa to remain closed until early 2027. With that, the association is breaking with the trend somewhat. Various analysts and traders reasoned that it is just a matter of waiting until the ports can reopen. UAC is now in effect sending the signal that we should assume the ports will remain closed in the coming months and that growers and exporters must adjust their strategy accordingly. Export in heavy weather The effect of the problems around the ports can be clearly seen in the export figures published yesterday by the Ukrainian Ministry of Agriculture. In the current season up to 1 September, Ukraine exported 3,7 million tonnes of grain and pulses. Exports in August amounted to 981.000 tonnes. A year earlier, the total stood at 4 million tonnes, of which 2,4 million tonnes were exported in August. Export capacity via alternative routes outside the Black Sea is limited. The result is that, just as in Russia, relatively large amounts of grain in Ukraine remain above the market and that is putting pressure on prices in the domestic market. For Ukrainian growers, that is a major problem. Some analysts warn that low grain prices could have consequences for the 2027 harvest. About half of the winter rapeseed has already been sown according to the Ukrainian Ministry of Agriculture and in a few weeks growers will also want to sow winter wheat. Growers do need to have sufficient liquid funds available to be able to finance the crop. Market expectations for Ukraine are bleak and some experts expect acreage could be lower because of financial problems among growers. Drought in Germany The German Ministry of Agriculture has published new figures on the grain harvest in Germany. Total production is estimated at 37,4 million tonnes. That is 7,3% less than last season. The yield therefore comes to around the five-year average across Germany as a whole. The differences between the federal states are large. The south has suffered much more from drought than the north. In the southern states of Bavaria and Baden-Württemberg, the grain harvest is respectively 10,6% and 11,9% lower than last season. In Mecklenburg-Western Pomerania, the yield is 2,3% higher than last season. Despite the news being reasonably bullish, the fact that prices on the futures market took a step back does not mean, according to various analysts, that the market has reached a temporary peak. The correction is partly due to traders and speculators wanting to take profits. Some analysts draw a parallel with the price movement in 2021. Back then too, prices rose around and after the harvest. That upward trend, in softened form, continued later in the season as well.