In an extraordinary week of volatility, grain markets are on the whole right back where we were this time last week. Oilseed markets however have remained elevated, in part from a continued strength in US soy demand and elevated vegetable oil.

In what was a shock to markets, Russia’s withdrawal from the Ukraine export corridor deal last weekend sparked a quick risk premium being added back into wheat markets, but this proved to be very short lived.

Today we teamed up with Kite Consulting to talk geo-politics, the war in Ukraine and milk and feed markets – listen to the podcast here

By Wednesday morning, Turkish President Erdogan reassured markets that exports out of Ukraine would be ongoing, as vessels continued to leave Ukraine, with Russian commitments quickly backtracking on the weekends position.

Yet risks remain, and it is important to recognise that there is still no agreed extension to the grain export deal.

U.N. chief Antonio Guterres said on the 3rd Oct he pushed Russia and Ukraine to extend the deal, still set to expire on November 19th. However, with Russia having restarted its cooperation on Wednesday, President Vladimir Putin said he reserved Moscow’s right to withdraw again, but that Russia would not impede shipments of grain from Ukraine to Turkey. Certainly, a lot of backtracking and mixed messaging from the unpredictable Kremlin.

For corn markets, and there has been a recovery in US ethanol production, but export sales have been somewhat disappointing. While for US soybeans, export commitments to China have continued at pace.

Against the backdrop of commodity demand, the US Federal Reserve announced a 75 basis point hike, bringing the interest rate to 4.00%. The increase is expected to be another severe blow to the economic outlook for 2023 and has put pressure on other central banks to raise their domestic interest rates. The Bank of England also announced a similar 75 basis point interest rate hike and forecast a long-lasting recession.