Grain exports will continue to flow out of the Black Sea region, according to news from United National Secretary General Antonio Guterres on Thursday that a deal was reached. The U.N. helped to broker the original agreement along with Turkey, which was due to run out this weekend. The U.N. reports more than 11 million tons of ag product has been moved from the region adding up to more than 520 shipments.
The Black Sea Grain Initiative has been extended for 120 days from Nov. 18, without any changes. The deal will facilitate safe navigation for Ukrainian exports of grain, foodstuffs and fertilizers from Black Sea ports to continue.
The deal is bearish for U.S. corn and wheat exports, which are already lagging. Ukrainian corn and wheat prices are being offered at substantially lower prices than the U.S. making us less competitive in the global market.
John Heinberg, Total Farm Marketing says, “Right now even with that dollar breaking like we’ve seen the last handful of days you know the U.S. prices are still going to have that downward pressure at least from those cheaper grains that other importers can look at.”
Russia confirmed the extension on Thursday but said it expected progress on removing obstacles to the export of Russian food and fertilizers, and the U.N says they’re fully committed to that.
“Meantime Russia is narrowing what they want, saying we don’t want that much, we just want some of the sanctions to ease and we’ll happily let that go through. We’ll see where this ends up,” says Kevin Duling, KD Investors.
The export of Russian ammonia via a pipeline to the Black Sea has not yet been agreed upon as part of the renewal. Ukraine says Russian exports of ammonia through its territory could only be allowed if the Kremlin agrees to exchange all war prisoners. Ukraine still wants the deal extended by a whole year and with one more export port added.
