ADMISI London Wheat Report for 18 July

Black Sea Grains deal officially ended today. Plenty of pyro hitting Ukrainian infrastructure in response for the drone based bomb boats that hit the Kerch Bridge in Crimea yesterday. Fighting in Eastern Ukraine continues and the meat grinding process of trying to attain sq/kms is continuing. Russian defensive lines are holding, better than expected really and the Ukrainian offensive does not appear to have the breakthrough punch required, as they have said themselves, they aren’t moving forward in a drastic fashion. 100k Russian troops amassing near Kharkiv, with intelligence saying they will start pushing shortly to try an alleviate pressure further down. All to play for ladies and gents, all to play for. No sign of this ending anytime soon and nor does it appear to be as the amount of $$$$ being made on the sidelines is astronomical.

So after the Corridor ended, Russia have been in talks with Turkey to carry on exporting their own grains, with a 45Mmt exportable surplus from current S&D this year so a deal will be inevitable so interesting to see what will occur regarding Ukrainian exports. The graph below depicts Ukrainian export flows and shows the increase in Danube exports. Impressive for sure, but the Grains corridor still commands 40/50% of vols, and no matter what people say, it most certainly isn’t diddly squat. If they do agree to dredging the Danube and allowing larger draft up to the river ports, then a significant amount can be alleviated from Odessa. Time will tell and let’s see what happens in the next few days.

USA crop conditions report came out last night with some marginal improvements seen.
Corn condition 57% Gd/Exc (+2% WoW, -7% YoY)
Soybean Condition 55% Gd/Exc (+4% WoW, -6% YoY)
Winter Wheat Harvested 56% complete (+9% WoW, -13% 5yr avg)
Spring Wheat Condition 51% Gd/Exc (+4% WoW, -20% YoY)
Topsoil moisture 62% Adeq/Surp (+2% WoW)
Subsoil Moisture 57% Adeq/Surp (+1% WoW)

Wheat markets continue to bounce around following the news and weather reports coming in. Russian exports continue to flow in significant volumes. Over the last week, average Russian FOB prices dropped by $1 to $231.5, reflecting the strengthening of the ruble according to SovEcon. Matif Sep-23 wheat was trading around the €233.75/t levels going into the close. London was also supported on the back of this. Physical UK feed wheat is still to expensive and with a significant carryover, lack of consumer demand and a good crop on the horizon, something will have to change.

Iran slammed a tender in today for 180kt of corn which included Ukrainian origin. Algeria tendered to buy up to 240kt of corn from Brazil and Argentina. Soybean complex was supported with Chicago trading up, Sep-23 beans were up 12 cents. Matif rapeseed was also supported with Nov-23 trading around the €480 level going into the close.