Justas Eimontas. Global unrest does not give peace to grain prices

Before the US envoys visited both Russia and Ukraine, the markets were hopeful about a possible breakthrough in peace negotiations: this was reflected in the falling grain prices. However, the meetings did not yield tangible results, and renewed strikes on sea port infrastructure continue to drive prices up.

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Due to the paralyzed economic activity in the Black Sea, Russian exporters are seeking routes through Baltic ports. Latvia announced a plan to apply 300% tariffs on Russian grains, but a final decision has not yet been made.

The Lithuanian Government has also clearly stated that the country’s infrastructure should not be used for the export of Russian grains and has tightened the control of the origin of transit cargo. However, under the current EU law, the transit of Russian grains is not sanctioned, so cargo cannot be unilaterally stopped. Meanwhile, more than 80 ships carrying wheat have already formed a queue on the Danube River.

Tensions are also rising in the US-Iran conflict: Houthi rebels have seized a strategically important island in the Strait of Hormuz. The instability of the situation is driving up oil prices: it has already exceeded the $100 per barrel mark.

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Soybeans and corn are falling

While grain prices are rising again, soybean and corn prices are moving in the opposite direction. On September 11, the US Department of Agriculture released its monthly report, the data of which did not bring favorable news for those expecting soybean and corn price increases.

The latest report increased soybean yields in the US, although the market expected lower forecasts. It is estimated that the yield should reach 3.6 tons per hectare, and production has reached record volumes – as much as 123.4 million tons.

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