Black Sea corridor negotiations will take place today but Ukraine President Volodymyr Zelenskiy says he doesn’t see any interest on the part of Russia to continue the agreement that expires May 18. Ukraine has clear agreements with the UN and Turkey to continue the grain initiative, Zelenskiy said in Helsinki. Meanwhile Russia is now saying the US was in on the Kremlin “attack” which the US has denied.
A senior Turkish official has said that Turkish state lender Ziraat Bank could work as an intermediary to process payments for Russia’s grain exports, adding the US and the UN would need to approve each transaction. Ziraat would not be involved unless all sides sign off on the agreement, the official said. No comment was made on whether the bank could be involved in payments for Russian fertiliser. Ziraat would serve in a similar role as JPMorgan, which has processed one payment and reportedly been given approval for around another 40 such transactions. 

Ukraine’s wheat harvest in the 2023-24 season is seen at 16.34Mt, according to Agritel. That’s up from a November forecast of 15.04Mt, but would still be the smallest crop in 11 seasons. The raised outlook is largely due to higher than expected winter wheat acreage. Yield estimate is maintained at 3.8 tonnes/hectare, below the five-year average. 

US weekly export sales of wheat at 211,100t for 2022-23 were up 36pc from the previous week and 14pc from the prior 4-week average – market was expecting 125kt. Net sales of 279,700t for 2023-24 were better than expected. Corn net sales were a reduction of 315,600t for 2022-23, a marketing-year low after China cancelled of 560 000 t Net sales for 2023-24 were 121,000t Soybean sales of 289,700t for 2022-23 were down 7pc from the previous week, but up 78pc from the prior 4-week average. 

Jordan’s state grain buyer reportedly purchased 60,000t feed barley from optional origins at US$260/t c&f, for Oct shipment. Separately after 120,000t feed barley from optional origins, for Oct/Nov shipment. 

Tunisia’s state grains office is seeking 100,000t durum wheat and 75 000t feed barley in a tender that closes today. 

Offshore markets gave local values something to trade off for a change. Since February, The Australian dollar equivalent of Chicago wheat futures had fallen around A$80/t. Over the same period the local market fell around $30/t. US futures have added back over A$25/t which has largely been driven by conjecture over the export corridor. 

The AUD snuck back above 0.6700 overnight, returning to levels seen post the latest RBA hike. For the amount of noise in global macro markets, the AUD has been amazingly stable. It has however had a bigger influence in local values than US futures, potentially an indication that the local trade isn’t overly exposed to the US futures markets.
El Raino? Southern NSW into Vic is set for up to another inch on the 12-day outlook while the western part of WA’s cropping belt is looking at similar falls. Meanwhile, Qld and northern NSW are best described as patchy. Some areas have parked tractors waiting for more moisture while pockets of northern NSW need to dry out to get back on. If the meteorologists are correct and we head into El Niño mid-year it looks more like it will be a diverse impact. Profiles should protect some areas throughout the eastern states so it’s hard to see a widespread disaster – however, its early days and, if basis is anything to go off, markets remain aware that the risk is all in front of us.