Justas Eimontas. Grain prices rise to heights not seen for a long time

The worst news comes from across the Atlantic: corn yield forecasts in the United States (US) are being lowered. During the recent independent agricultural observers’ “Pro Farmer” tour of the country’s cornfields, a problem related to this crop’s yield was revealed. The latest forecasts are lower than those provided by the US Department of Agriculture: this could be a serious signal that the department may reduce both corn yield and total harvest forecasts.

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In addition, the US is also facing crop condition problems: current data shows about 57 percent of corn crops are rated good or very good.

However, the country receives good news from China: over the week, China ordered more than 1 million tons of soybeans from the US. China is facing significant harvest problems caused by heat and heavy rains. Therefore, the potential for soybean imports is growing.

Wheat prices storm long-unseen highs

However, wheat continues to attract the most market attention. The MATIF and CBOT exchanges directly react to all world events, and prices have reached 3-year highs. The growth was mainly driven by fund actions, geopolitical factors, and the so-called war premium.

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With ongoing active military actions in the Black Sea ports – Odesa and Novorossiysk, wheat exports have been completely halted, and due to damaged port infrastructure, loading operations are impossible. Of the 3 main deep-water Russian ports, only one is currently operational, but it is the smallest in terms of capacity. It is estimated that until now, Russia together with Ukraine exported about 7 million tons of wheat monthly through the Black Sea, but now this amount has significantly decreased.

Among more favorable news is the physical wheat trade taking place in the Baltic Sea region. Currently, export volumes have increased by about 50 percent.

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