Monday Market Briefing - 18th September 2023

Some reductions in European crop forecasts helped us to a slightly firmer week but we remain in a pretty tight price range. On Friday the EU confirmed the ‘ban’ on Ukrainian over-land exports into neighbouring Countries was being allowed to expire that day without renewal. This was the deal in May 23 which kept Ukraines western border open by promising that all grain would transit through the closest neighbouring states and continue north and west. The logic now appears to be that seeing as it’s worked we don’t need it anymore.  

Ukraines wheat and corn continues to enjoy both tariff-free and quota-free access to European markets, but the EU has now placed the onus back onto Ukraine herself to somehow ensure that export volumes are controlled to prevent distortions. Predictably enough, Poland and Hungary this weekend both threatened unilateral action to stop any repeat of the local influx that destroyed their internal markets in the spring. Even a temporary hiatus in this grain flow is likely to firm up markets in the short term and could easily wipe out the discount 23 crop currently enjoys against the 2024 and 2025 crops.  

At home, milling wheat premiums show no sign of cracking with millers still non- committal about what variations in crop quality they will be able to tolerate this season. Accepting min 73 kg and min 180 hagberg would bring a lot more material into play and calm everything down- surely only a matter of time ?  Malting barley by contrast was significantly down on the week, several domestic buyers don’t expect to be active again pre-Christmas. The export market will try to take the strain here but the market will have to adopt a structure that encourages as much material as possible into the New Year.  

Have a good week.