Brussels is out with rules for grain from Ukraine – Analysis of Grains & Raw Materials

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Analysis Grains & Raw Material

Today 12:00 noon – Jurphaas Lugtenburg

Europe is said to have reached a compromise on extending the relaxed rules for the import of agricultural products. The cold is not over yet. For example, Poland and Ukraine are sitting around the table today about grain imports. It is now becoming dry in Russia. This does not immediately cause any problems, but rain should not be delayed for weeks according to SovEcon.

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The May wheat contract on the Matif closed yesterday €0.25 lower at €200.75 per tonne. On the CBoT, wheat inched higher to close 0.7% higher at $5.47½ per bushel. Corn was down, losing 1.3% to $4.26¾ per bushel. Soya also suffered a slight loss, although the loss was limited to 0.5%. Soy came to $11.92½ per bushel.

The Black Sea region is again attracting attention on the grain market. Yesterday evening (March 27) it was reported that Brussels had reached an agreement on the duty-free import of grains and other agricultural products from Ukraine. The more flexible rules for imports should last until June 2025. According to Reuters, the deal would be virtually identical to the draft published last week. An emergency brake has been built in for poultry, eggs, sugar, oats, corn, groats and honey if imports exceed the reference period. That reference period has been adjusted in the new proposal. Brussels’ original proposal used 2022 and 2023 as reference years for maximum imports from Ukraine. Several member states, including France and Poland, also wanted to take this into account in 2021 – the last year before the Russian invasion. As a compromise, the second half of 2021 is now included in determining the export ceiling.

Today, Poland and Ukraine are again sitting at the table about grain imports. Polish farmers have been demonstrating for months against what they consider unfair competition from grain from Ukraine. According to the demonstrators, goods from Ukraine that should be in transit remain at too low prices on the Polish market. Local farmers are therefore being pushed out. According to the Polish Minister of Agriculture, there is talk of a system with licenses for the import of agricultural products from Ukraine. What comes in must also go out in that system. Poland and Ukraine differ on which products should be included. Romania and Bulgaria have already made such agreements with Ukraine.

Drought and cold
Things are starting to get a bit dry in Russia, writes SovEcon. This does not immediately cause problems for the wheat, but it should rain within a few weeks, according to the market office. Frost damage in winter wheat has been reported in the American state of Kansas. Up to 7 degrees of frost was just too crazy for some plots of winter wheat that was stretching.

The topic on the American market is and remains the acreage forecast that the USDA provides at the end of the afternoon Dutch time. Analysts expect American farmers to sow more soy and less corn this season. The American corn stock is estimated to be relatively large. According to some analysts, this is why, despite an expected smaller area of ​​corn, it remains somewhat weak.