Today, the agreement regarding the export of grains from Ukraine by sea expires. The United Nations has requested Russia to extend it before the weekend, but so far, no response has been received. It is expected that the deadline for reaching a new agreement may be delayed, if it happens at all.
It turns out that the quantity of grains exported by sea from Ukraine has significantly decreased in July. This is partly due to seasonal factors, but on the other hand, Russia has been making export difficult by increasing inspection times and not responding to new loading requests. Recently, 29 such applications for export until July 17th were submitted, but no response was given to these inquiries.
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Very low export from Ukraine by sea until yesterday. Source: Bloomberg
Wheat has been rebounding for the past three days, reaching its highest level since June 28th. Seasonality indicates a possible continuation of the upward trend. Furthermore, net positioning has increased significantly, mainly due to a substantial reduction in short positions. Higher oil prices can also have a positive impact on wheat prices as it is one of the key cost factors.
A significant reduction in short positions is underway. Source: Bloomberg, XTB
The price has been rebounding for three consecutive days. Seasonality suggests further growth, at least until the middle of next month. If Russia does not decide on a new agreement, the next significant resistance level is in the range of 700-710 cents per bushel. Source: xStation5.
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