Chicago Board of Trade wheat futures fell to similar levels to what they were prior to the Ukraine/Russia war before finishing the week higher for the first time in a month.
The war continues and while exports are occurring from the region they're still impacted by the conflict.
A good example of the ongoing real market impact was the recent purchase of wheat by Egypt's General Authority for Supply Commodities.
The purchase was big at 815,000 tonnes for delivery through August, September and first half October. Of that, 350,000t was French, 240,000t was Romanian, 175,000t was Russian, and 50,000t was from Bulgaria.
The fact Russian wheat wasn't as prominent as you would otherwise expect is an indicator of the nervousness that remains over the Ukraine/Russia situation and resulting reluctance to rely on supply from the region.
The large buyers from the Middle East and North Africa are remaining active in purchasing grain. In recent weeks we have now had large parcels purchased by Egypt, Saudi Arabia, Algeria, Tunisia, Jordan and I'm sure others.
While they are traditionally active in purchasing at this time of year as harvest picks up in the northern hemisphere, the size of the purchases and how far forward they have been, has been noteworthy for the market.
These factors may well suggest they're viewing the recent weakness in prices as a buying opportunity to secure grain. Otherwise, a buyer would typically stand aside or buy smaller amounts.
Countries that prioritise food security are making sure they are securing it.
With an ongoing war in a major global grain producer, rising inflation and smaller winter crops in many areas of the world, there is still plenty of supply side risk.
I may be wrong, but it feels like the CBOT market may have over corrected to the downside.
Traded prices of international cargoes that we can see have not reflected the same level of downside as CBOT futures.
The theme continues locally here in Australia, although market prices have been harder to gauge with less volume trading.
Published bids advertised by buyers have pulled back significantly and many buyers appear to be patient. Grain that is trading, however, continues to be at much better values than published bids, and often firm bids are being placed on grain offered for sale on Clear Grain Exchange (CGX) much higher than those published bids.
There were 21different buyers that purchased grain offered for sale on CGX with more searching. Hence appetite remains, the market is just trying to work out the price.
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