Yusuf Khan and Will Horner reported in today’s Wall Street Journal that “Good agricultural weather and the rush of Russian grain ships across the Black Sea dampened global wheat pricesa welcome sign for vulnerable countries struggling with soaring food prices.
“The good mix of sun and rain in the United States, Europe and Australia has raised hopes that the end of summer harvests will be abundant. This should help balance the significant amounts of Ukrainian wheat stuck in the country by fighting and a Russian naval blockade.
“Meanwhile, Russia— who should produce a record wheat harvest— managed to take advantage of the situation, maintain the fluidity of its grain exportseven as Western banks and insurers retreated, reluctant to trade Russian commodities.
Khan and Horner explained that “Benchmark wheat prices are down more than a quarter of their post-invasion peakand raw material exchanges for approximately $9 a bushel. They are still higher than before the war and before wheat prices started to rise during the pandemic.
But the slowdown gives a glimmer of hope that prices for the bread and pasta staple ingredient won’t return to their peaks earlier this year.
“The United States Department of Agriculture raised its wheat production forecast by 8 million bushels earlier this month, while a crop progress report this week showed winter wheat crops were 41% full, ahead of the five-year average rate.
The Journal’s editors added that “even if Russia blocks Ukrainian ports and seizes farmland, there was no slackening of ships leaving the busiest Russian grain terminals in the Black Sea. Monthly departures of cargo-laden bulk carriers leaving the Russian Black Sea port of Novorossiysk remained largely the same over the past year, averaging about 60 per month, according to MarineTraffic data.
Reuters writer Alexander Winning reported yesterday that “A first freighter left the Russian-occupied Ukrainian port of Berdyanska local official said on Thursday, after Russia announced that the port had been cleared of mines and was ready to resume grain shipments.”
Meanwhile, Associated Press writer Francesca Ebel reported yesterday that “Russian forces withdrew from strategic Black Sea island on Thursdaypotentially mitigating the threat to vital resources Ukrainian port city of Odessabut maintained their push to encircle the last stronghold of resistance in the eastern province of Luhansk.
“The Kremlin described the withdrawal from Snake Island as a ‘goodwill gesture’. But the Ukrainian military claimed to have forced the Russians to flee in two small speedboats following a barrage of Ukrainian artillery and missile strikes.The exact number of troops was not disclosed.
The AP article noted that “Ukraine and the West have accused Russia to block Ukrainian ports to prevent grain exports, contributing to a global food crisis. Russia has denied this and said Ukraine must remove mines from the Black Sea to allow safe navigation.
“Turkey sought to broker a deal to unblock grain exports. But talks are dragging on as Kyiv fears Russia will exploit the removal of mines to attack Odessa.
Also, Jon Emont reported in today’s Wall Street Journal that “Indonesian President Joko Widodo met the Russian leader Vladimir Poutine in Moscow a day after holding talks with the Ukrainian President Volodymyr Zelensky Wednesday in Kyiv – meetings in which Mr. Widodo said he called for peace and sought solutions for disruptions to the global food supply caused by war.
“The visits to the two countries – the first by an Asian leader since Russia invaded Ukraine –symbolized efforts by much of the developing world avoid openly criticizing Russia or be perceived as choosing a side. In remarks alongside Mr. Zelensky on Wednesday, Mr. Widodo, who is popularly known in his country as Jokowi, did not mention Russia by name or Moscow’s role in cutting off Ukrainian Black Sea ports who has prevented Ukrainian grain to reach global markets.
“On Thursday, Mr. Widodo spoke to Mr. Putin about trade, investment and tourism between the two countries, he said from Moscow in televised remarks. He welcomed what he called Mr Putin’s guarantees that food and fertilizers from Russia and Ukraine would be shipped safely, although he did not provide any details on how it would go. UN efforts to negotiate an agreement remain unsuccessful.”
Somewhere else, Bloomberg writers Michael Hirtzer and Kim Chipman reported yesterday that “Corn is America’s number one crop again after soaring grain prices, farmers were encouraged to ignore inclement weather and high fertilizer costs to plant more than planned while cutting soybeans.
“Chicago corn fell to the lowest since early February after the United States Department of Agriculture has declared growers will plant 89.9 million acresa slight increase from the March estimate. soybean seedlingswhich had been seen to overtake maize for only the third time in a century, fell 3% to 88.3 million acresstill the third largest ever.
Hirtzer and Kim Chipman stressed that “a bountiful harvest this fall would help replenish war-depleted reserves and potentially mitigate food inflation.”
And Bloomberg writer James Poole reported today that,
Global food inflation is expected to ease as major agricultural commodities such as wheat, corn and cooking oils extend their slide to the lowest levels in months.
“The last catalyst is a report from the United States Department of Agriculturewho raised its estimate of the area planted with maize in the largest producer in the world this year. In wheatfields planted last fall are being harvested and supplies are coming to market, and for cooking oilsIndonesia’s top producer increases exports after ban.
“Corn Chicago Friday futures extended yesterday’s losses by more than 5%, falling to lowest intraday level since early Februarybefore the Russian invasion of Ukraine on February 24. Wheat falls to lowest since day after Russian invasion. Soybean oil pulled out lowest rating since January.”
“Global food costs could show a further decline from the March record when the United Nations releases its latest monthly price index next week,” the Bloomberg article said.