ADM are reporting that markets have rebounded from lows earlier in the week with the escalation of tension in the Black Sea region. The large-scale mobilisation of new troops by the Russians and the recent mystery around the Nord Stream pipeline throws into question the longevity of the Ukrainian export corridor agreement which is up for extension in late November.
Despite the agreement, Ukraine’s exports as expected, are running well behind with 7.2M tonnes having been shipped compared with 12.8M tonnes year on year. These include 2.5M tonnes of wheat, 0.6M tonnes of barley, and 4.1M tonnes of corn.
Geopolitical factors have helped this rally in commodity prices, despite the US$ hitting multi-decade highs, as the US Fed confirm they will not hesitate in further raising interest rates to curb inflationary pressure.
The much talked about collapse in the value of sterling means thing are looking bleak for the pound and the UK economy following widespread criticism over Government policies. However the weaker currency has supported farm-gate prices and with other exchanges moving higher, UK prices have become export competitive although buyers remain few and far between given the current economic upheaval.
Malting barley
ADM reort that malting barley markets are inactive, and there is little trading on the whole. Farmers, both in the UK and across the EU/Baltic regions, are absent from the market, as rising feed prices pressure quality premiums.
Maltsters in the UK remain well covered against brewing requirements, however, the small quantities trading are coming at higher prices as the lack of offers in the market is noticeable.
Weaker sterling is helping to support export prices, where the UK still is attracting a premium over Danish origin due to the more favourable nitrogen levels. This demand should in turn help to keep prices supported in the coming weeks.
