Russia and Ukraine signed an agreement in Istanbul on the export of Ukrainian grain.< /p>
The price of wheat fell sharply on Friday in Chicago and on Euronext and thus returned to its pre-war course in Ukraine in the wake of the agreement signed in Turkey between Moscow and kyiv which should allow the ;export of Ukrainian grain to the Black Sea.
In Chicago, a bushel of wheat (around 27 kg) for September delivery fell 5.86% to US$7.59 ( approximately CA$9.80) and thus returned to its price before Russia's invasion of Ukraine on February 24.
In the wake, corn, of which Ukraine is also a producer, slipped 1.99% to US$5.6425 (about C$7.30) per bushel for same month delivery.
Ukraine and Russia ended up signing a hard-negotiated agreement in Istanbul on Friday with Turkey and the UN that will establish secure corridors to allow the movement of merchant ships in the Black Sea.
Markets hope 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.
It surprised me and the market reaction suggests there was a wheat premium on the market, especially in Europe and to a lesser extent in Chicago futures, until this news falls, he noted.
On Euronext, a ton of soft wheat for September delivery closed at 325.75 euros (around C$428), falling 6.41%.
Gautier Le Molgat, analyst at Agritel, however, recalled the uncertainties raised by the concrete implementation of these maritime corridors.
Michael Zuzolo was also skeptical.
I don't think I'm the only one who doubts that this will move a lot of grain given what we've been through in the last couple of months with the movement of grain by rail out of the Ukrainian areas through the Russian areas, then by ship to the Sea of Azov, then into the Black Sea to Turkey and North Africa, he said.
The analyst wondered if wheat and maize prices would continue to fall given the weakness of the American dollar and the drought affecting crops in France, Romania and Spain.