Under the influence of the talks, the price of wheat fell below $6/acre in Chicago. In the Euronext market in Europe, wheat was traded at 234.50 euros per ton; the price declined to 223 euros during the day, the lowest level since July. The price of U.S. corn was also about $4.47 per acre on Wednesday, while in Euronext, corn was about 257.50 euros per ton.
Although Russia and Ukraine are major grain exporters, they continue wheat exports at a rate more than 50% lower than a year ago. The U.S. Department of Agriculture's update, released on Tuesday, said the two countries' total wheat exports at the end of the current campaign were expected to be 50.5 million tons, while the amount was over 62 million tons a year ago. Sea transport difficulties in the Black Sea were cited as the main conditions for this decline.
Russia is trying to divert its shipments to Baltic Sea ports, while Ukraine is trying to take advantage of rail, road and river transport. However, it was reported that these alternatives were insufficient and that part of the harvest was blocked. According to Commerzbank analyst Carsten Fritsch, markets have largely priced possible diplomatic progress, while maintaining the status quo can make agricultural products expensive. With strong exports and domestic demand in the United States, lower stock expectations also supported soy prices.
