SINGAPORE/LONDON (Aug 1): Wheat and corn futures fell as the first grain ship since Russia’s invasion left Ukraine, bringing some relief to a tight food market.
The Razoni, a cargo vessel carrying corn, headed to Lebanon on Monday morning, according to the United Nations. Ukraine Infrastructure Minister Oleksandr Kubrakov said there were 16 other ships in the greater Odesa region waiting to sail.
Ukraine is usually one of the world’s biggest wheat, corn and vegetable-oil suppliers, but many obstacles remain before it can ship grain as usual — including securing crew and insurance for ships.
“It will be a real test for the safety corridor, as many questions remain about actual conditions and ability of new cargoes to get safe access to the Ukrainian ports,” Agritel analysts wrote in a note.
Corn fell for the first day in six, dropping 2.2% to US$6.0275 a bushel, while wheat fell for a second day, slipping 1.8% to US$7.93 a bushel.
Ukraine will start moving agricultural goods to ports this week, Kubrakov said. The country has been shipping some volumes of grain by road and rail, while the ports remained closed due to Russia’s blockade, but in much smaller volumes than it can export by sea.
Corn exports could more than double from nine million tonnes to 18-22 million tonnes per annum “if the corridor is even mildly successful,” wrote Michael Magdovitz, senior commodities analyst at Rabobank. “To put the additional nine million tonnes of corn exports in perspective, the US and EU have nearly lost that amount of grain in the recent heat wave.”
Soybean prices declined for the first time in seven days and soybean oil fell after rising for five days. Corn, soybeans and soybean oil surged between about 10% and more than 13% last week, on worries over hot and dry weather in North American and European growing areas.
In the US Midwest, rains should have favoured southern areas through Sunday, and return to far northwestern areas, according to a Maxar forecast late last week.
Rainfall should then build across central and eastern areas Monday, it said. Wetter weather should favour some areas of eastern Europe through Monday.