Grain market: Black Sea conflict and Brazil-China agreement redefine global outlook

Published 2024년 12월 2일

Tridge summary

The global grain market is experiencing fluctuations due to tensions in the Black Sea and the agreement between China and Brazil for sorghum exports. The conflict is causing uncertainty in the wheat market and increasing transportation costs, potentially leading to higher prices for CIF costs. The authorization of Brazil to export sorghum to China presents a new opportunity for the Brazilian market and could influence U.S. corn production. Investment funds are adjusting their positions in commodities like soybeans, corn, wheat, and cotton, adding volatility to the grain market. The market's direction will be influenced by China's behavior in sorghum and soybeans, as well as geopolitical and trade tensions.

Disclaimer:The above summary was generated by Tridge's proprietary AI model for informational purposes.

Original content

Recent tensions in the Black Sea, coupled with the agreement that allows sorghum to be exported from Brazil to China, are impacting the dynamics of the global grain market. At the same time, investment funds are adjusting their positions, increasing uncertainty about the behavior of agricultural commodities. The escalation of the conflict between Russia and Ukraine in the Black Sea has generated uncertainty in the wheat market and increased transportation costs. According to Ignacio Espinola, senior grain analyst at Hedgepoint Global Markets, the risk of attacks in the region and the collection of an "ice premium" during the winter — which adds $1 to $2 per metric ton to the freight price — are contributing to the pressure on costs. “The increase in freight prices may directly affect the final CIF cost, since shipowners may refuse to operate in the region due to the conflict,” says Espinola. In a significant move, China authorized Brazil to export sorghum, opening up a new ...

Source: Portal Do Agronegocio