Euronext witnessed a decline in wheat prices following the announcement of a Black Sea shipping agreement that significantly impacted the market. The U.S. revealed agreements with Russia and Ukraine aimed at safeguarding maritime trade in the Black Sea, leading to concerns about heightened export competition, as reported by traders. May wheat on Euronext saw a 0.9% decrease, settling at 220.25 euros per metric ton, marking its lowest price since March 12 at 219.75 euros.

In efforts to end the conflict in Ukraine, Washington’s separate agreements with Kyiv and Moscow focused on ensuring safe navigation in the Black Sea and preventing attacks on energy facilities by the two nations. Despite the recovery of Black Sea grain export volumes post initial war disruptions, traders noted that enhanced security measures and U.S. commitments to facilitate Russian agricultural export market access could intensify competition in the sector. Moscow anticipated that the deal would necessitate the lifting of certain Western financial sanctions.

While the financial aspects of the agreement could potentially benefit Russian exports, market experts highlighted that the Black Sea trade dynamics were largely unchanged from pre-war conditions. Futures dealers pointed out that any positive impact on Russian exports might be more evident in the upcoming season, with the current season’s shipments being hindered by a strengthening ruble.

Euronext experienced slightly more significant drops in deferred positions compared to May futures, with traders anticipating more clarity on the agreement’s specifics. Despite initial market jitters during the negotiation period, losses on Euronext were relatively moderate. The ongoing fluctuation in prices was evident as Euronext lost 5 euros between consecutive days, with market participants indicating that these adjustments were already factored into the pricing.

Furthermore, Chicago wheat prices also saw a decline, with export sentiment in Western Europe remaining cautious. Traders highlighted the improved export competitiveness of Western EU countries, suggesting the potential for increased export sales if exchange rates remain favorable. However, concerns were raised about the impact of the upcoming Ramadan period on demand, as holidays in Muslim-majority countries could lead to reduced market activity.

Traders reported that Russian, Romanian, and Argentine wheat prices for April/May delivery were trading around $244-$247 per ton Free on Board, slightly lower than the prices for Western European Union wheat. Ukrainian wheat prices were noted to be even more competitive, priced approximately $3-$4 below Russian 11.5% protein wheat, while U.S. soft red winter wheat was available at a cheaper rate of around $233-$237 per ton FOB.

Data revealed that EU soft wheat exports for the season had reached 15.46 million metric tons, reflecting a 35% decline compared to the previous year. The evolving market dynamics, influenced by geopolitical agreements and trade relationships, continue to shape the landscape for wheat prices on Euronext and beyond.