Lack of Black Sea shipping agreement causes little market concern amid active Argentine exports

The lack of new agreements on safe shipping in the Black Sea following talks between Ukraine and Russia has so far caused little concern in the global wheat market. Traders are primarily focused on growing competition from Argentina, which is offering grain at lower prices.

An additional market signal came from the results of Algeria’s import tender, in which the country purchased around 700,000 tons of wheat. Traders believe Argentina could supply a substantial part of this volume, with the country expecting a large harvest. This is intensifying competition between suppliers from South America and Europe.

Argentine wheat with 11.5% protein for December shipment was quoted at $237–243/ton FOB. This is around $30/ton cheaper than West European wheat, weakening the competitiveness of European grain in export markets.

Meanwhile, the lack of progress in negotiations on safe shipping in the Black Sea remains a source of uncertainty. According to traders, the near halt in Russian shipments from the Black Sea is being partly offset by increased Russian wheat shipments through the Baltic Sea and Ukrainian supplies through Romania. No new safe shipping agreement has been reached following the talks in Abu Dhabi.

Amid growing competition, the December wheat contract on Euronext fell 1.6% on November 12 to €232.50/ton after a four-day rally. Traders are also monitoring harvest progress in the Southern Hemisphere, the competitiveness of Russian exports and further developments in negotiations over the war in Ukraine.

Tags: grain, EU, prices, Black Sea region, wheat, Argentina, Ukraine, Russia, export