War in Ukraine: Kiev and Moscow sign with Turkey and the UN the agreement on the export of Ukrainian grain

Steph Deschamps / July 23, 2022

Ukraine and Russia finally signed a hard-fought agreement in Istanbul on Friday, along with Turkey and the United Nations, that will establish safe corridors for merchant ship traffic in the Black Sea. Markets hope it will provide relief to countries dependent on the Russian and Ukrainian markets, which together account for 30% of world wheat trade.
 
The price of wheat fell sharply on Friday in Chicago and on Euronext, returning to its pre-war price in Ukraine, in reaction to the agreement signed in Turkey between Moscow and Kiev which should allow the export of Ukrainian grain in the Black Sea.
  
In Chicago, a bushel of wheat (about 27 kg) for delivery in September dropped 5.86% to $7.5900, returning to its price before the invasion of Ukraine by Russia on February 24. 
 
Corn, of which Ukraine is also a producer, slid a further 1.99 percent to $5.6425 a bushel for delivery in the same month.
 
On Euronext, soft wheat closed at 325.75 euros per ton for September delivery, down 6.41%.
 
However, Gautier Le Molgat, an analyst at Agritel, recalled the uncertainties raised by the concrete implementation of these maritime corridors.
 
Michael Zuzolo also remained skeptical. I don't think I'm alone in doubting that this moves a lot of grain given what we've experienced over the last couple of months, regarding the movement of grain by rail out of Ukrainian areas through Russian areas, then by ship to the Sea of Azov, then into the Black Sea to Turkey and North Africa.
 
The analyst questioned whether the price of the grain, but also that of corn, would continue to decline, given the weakness of the dollar and the drought affecting crops in France, Romania and Spain.
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