Wheat up as London hits 170GBP for the first time in two years; Paris wheat rises 1.2% to 236EUR; Chicago up 1.1% to 7.47USD a bushel.
Dave Nogger writes about the why’s and wherefores of market trading in great detail, I want to concentrate on what the impact might be here in Ukraine.
As the difference between the world market and the local price has widened, the pressure on local traders must be building and at some point the pull will surely outweigh the inertia.
Will we see sudden and dramatic price realignment as a result?
The block on wheat exports has done a fair job at keeping the local price at 1,500UAH (121GBP) for the last month and as far as I know customs still hold 24 ships in port on drummed up technical charges.
But customs can’t spin out delays indefinitely with out admitting that what they have really been up to was imposing a state sanctioned grain export ban in direct contravention of WTO rules. Even the WTO might be forced in to publicly asking some questions to save face.
Customs will have to give in at some point and probably soon.
Sunflower harvest is well underway and selling at buoyant prices which will ease the need for growers to sell wheat to generate cash to pay for seed and diesel for the current plantings.
Wheat supply might not dry up exactly but may well become a little firmer.
As we move in to October I think we will see some better wheat prices as all these holds start to lose grip and to be honest 300UAH extra would make a big difference to a lot of businesses budgets right now.
It all feels a bit like the calm before the storm.