Russia and Ukraine signed an agreement in Istanbul on the export of Ukrainian cereals.
The price of wheat fell sharply on Friday in Chicago and on Euronext, returning to its pre-war course in Ukraine, in reaction to the agreement signed in Turkey between Moscow and kyiv which should allow the export Ukrainian grain in the Black Sea.
In Chicago, a bushel of wheat (about 27 kg) for September delivery fell 5.86% to US$7.59 (about 9 CA$.80) returning to its price before Russia's invasion of Ukraine on February 24.
Corn, which Ukraine also produces, slid 1.99% to US$5.6425 (about C$7.30) a bushel for same-month delivery.
< p class="e-p">Ukraine and Russia ended up signing in Istanbul on Friday, with Turkey and the UN, a fiercely negotiated agreement that will establish secure corridors allowing the movement of merchant ships in black Sea.
Markets are hoping it will relieve countries dependent on the Russian and Ukrainian markets, which together account for 30% of world wheat trade.
I hardly expected this given that the Russians are advancing further east and approaching the port of Odessa, commented for AFP Michael Zuzolo, president of the brokerage company. and Global Commodity Analytics and Consulting.
This surprised me and the market reaction suggests that there was a wheat premium in the market, particularly in Europe and to a lesser extent in Chicago futures, until the end of the year. until this news falls, he noted.
On Euronext, a tonne of soft wheat for delivery in September closed at 325.75 euros (around C$428), falling 6.41%.
< p class="e-p">Gautier Le Molgat, analyst at Agritel, however, recalled the uncertainties raised by the concrete implementation of these maritime corridors.
Michael Zuzolo also remained skeptical.
I don't think I'm the only one who doubts that it moves a lot of grain given what we have lived for the last couple of months, regarding the movement of grain by rail out of the Ukrainian areas through the Russian areas, then by ship to the Sea of Azov, then across the Black Sea to Turkey and Russia. #x27;North Africa, he said.
The analyst wondered whether wheat and maize prices would continue to decline, given the weakness US dollar and drought affecting crops in France, Romania and Spain.