According to the Agriculture and Horticulture Development Board (AHDB), world grain markets are reflecting two key drivers – events in the Black Sea and international weather predictions.

Wheat futures saw some support last week, largely due to concerns over rising tensions in the Black Sea region.

Meanwhile, Chicago wheat futures (Dec-23) were up 0.9% over the week. Chicago maize futures were down 2% over the same period, with an improved US supply outlook weighing on prices.

According to Russia’s Deputy Foreign Minister, Russia is still not satisfied with how the Black Sea grain deal is being implemented.

Russia has said that they will not agree to an extension of the deal (due to expire on July 17) unless demands to improve its own food and fertiliser exports are met.

These demands include the resumption of the transit of Russian ammonia through a pipeline via Ukrainian territory. The pipeline was damaged in a blast last week, though both Russia and Ukraine are denying responsibility.

Other impacts on world markets

The recent destruction of a dam in the Kherson region of Ukraine could also have longer term impacts on agricultural land, with a reported 4.4 cubic miles of water heading towards the Black Sea via the Dnipro River.

The damage has left 94% of irrigation systems in the Kherson region without water, an area which is among Ukraine’s most fertile and productive region. Markets will likely remain reactive to any further escalations in the area, according to AHDB.

With winter wheat harvest now underway in certain regions of the US, and spring wheat in its heading phase, US weather remains an important watch point.

Up to 2in of rain forecast in Kansas and Oklahoma over the next week will likely slow down harvest progress in the region.

Though up to 3in forecast in parts of North Dakota and Montana could help improve the spring wheat crop condition.

The United States Department of Agriculture’s (USDA) latest World Agricultural Supply and Demand Estimates (WASDE) were released last Friday (June 9), with few unexpected changes.

However, world wheat ending stocks for the 2023/2024 season were raised more than analysts had expected, now at 270.7 Mt, up from the previous estimate of 264.3 Mt.

This increase is mostly on account of higher global production forecast, despite higher global consumption also being expected.