Black Sea Grain Initiative Deal Extension and Speculative Positions Impact Grain Markets

Agriculture – Black Sea Grain deal extension in focus

Grain markets will focus on the Black Sea Grain Initiative today. The deal is scheduled to expire today and up until now, there has been no decision from Russia on whether they will extend their participation in the deal. Ukraine has shipped about 33mt of grains since July 2022 under the deal. Failing to extend the deal would lead to a tightening in grain markets, which would propel prices higher.

The latest Commodity Futures Trading Commission (CFTC) data shows that money managers increased their net bearish bets in CBOT corn by 44,843 lots over the last week, leaving them with a net short position of 63,052 lots as of 11 July. The move was predominantly driven by fresh selling, with the gross short increasing by 36,038 lots. CBOT wheat saw a marginal reduction in the speculative net short, with speculators buying 1,878 lots to leave them with a net short of 52,128 lots. Meanwhile, speculators reduced their net long in CBOT soybean by 6,394 lots to 82,748 lots.