2023-05-18 09:33:06
Yesterday, on a razor’s edge, a two-month extension of the agreement that Ukraine will be able to continue exporting its grains through the Black Sea ports. The validity of the pact ended today, after the Moscow authorities decided last March that the extension would be for two months instead of the previous four. Putin’s team had been threatening until the last moment that it was going to turn off this tap because the other part of the agreement, the one that affected its cereal exports and, especially, fertilizers, was not being respected. The Spanish market, after the Chinese, has been the second recipient of cereal shipments from Ukraineonce the agreement was put in place, months after the war began. The evolution of the prices of wheat and corn during the last year in the futures markets has been clearly downwards. In the case of the first of these products, the price has fallen by more than 40 percent compared to the figures for the first half of May 2022 in Chicago and Paris. With regard to corn, the cut has been 26 percent in the North American market and 36 in the French capital.
This same downward trend has been registered in the Spanish domestic market. During last week prices had dropped by 20 to 30 percent (with a few exceptions) in the main plazas from what they were a year ago. The situation that occurs in mid-May can be described as curious. The first thing to note was the scarcity of operations. Second, the abundant supply in the ports as a result of the imports made in recent months, among other origins from Ukraine. And, the third, is the withholding of the supply by farmers and stockists who had stocks from the last harvest, since they expect price rises as a result of the fall in production this year. In fact, In the first mowings that have been carried out, yields have plummeted due to drought and high temperatures. We are facing a situation of extreme volatility.
#volatility #cereals