Monday Market Briefing - 22nd May 2023

Mr Putin had a very good week, having realised he needed a bit more time to finish off his 22 export programme his corridor was duly extended for the requisite two months. Elsewhere he was treated to the extraordinary sight of his old chum Syrian President Assad being warmly welcomed back into the Arab League Summit after a twelve year ban. If the butcher of Damascus can so easily be washed clean then Putin will be emboldened by knowing he can act with impunity himself- there will never be any meaningful consequences for his actions.

Hence prospects for the Ukraine war ending anytime soon diminish, markets increasingly view it as a long-term structural feature to be considered but not overly reacted to. We did trade lower on the week after the corridor was announced but by Friday we were rallying on crop news from the US as the first tours of the wheat belt confirmed a pretty poor outlook for that crop. The US tours will continue reporting this week and may exert more influence as the market searches for its new base level after all the turbulence of the last two years. Nov 24 LIFFE has opened up an £8 premium to the 23 crop which is an indication that nearby months may just be a little over-sold at current levels.

Baltic Port sellers including Germany continue to exert downward pressure on nearby positions including early new crop where everyone else is struggling to be competitive with those origins despite the definite buying interest from Spain which will help us when we get to harvest.

Have a good week.