Global grain markets continued the recent downward slide after Russia and Ukraine signed off on an agreement for the safe passage of grain through the Black Sea.
United States grain futures see-sawed through the week and plunged 6 per cent on Friday when the deal was inked.
The deal provides a de facto ceasefire through a safe passage shipping route through the Black Sea. Ukrainian pilots will steer ships through mines.
Grain markets have plummeted on the prospects of agreement to safely ship grain through the Black Sea war zone, although many question if the deal will achieve its objective.
Shortly after the deal was signed, Russian missiles hit a grain terminal in Ukraine's Odessa as they were readying the facility to load grain.
The deal between Russia and Ukraine, with Turkey and the United Nations included in the agreement as observers, seems to raise more questions than answers.
Among the biggest of these questions is whether commercial shipping companies will be able to access commercially viable insurance on Black Sea grain movements.
Ongoing uncertainty surrounding grain export volumes from the Black Sea is resulting in strong demand for other export origins where supply pipelines are not impeded by war.
European traders are reporting robust sales to North Africa, the Middle East and even Asia.
Reliable supply chains, coupled with the prospects of another large grain harvest in 2022, bodes well for Australia's grain export in the next 12 months. Global news wires reported that China may have bought as much as 1 million tonnes of Australian wheat last week. The sale appears to be a mix of milling and feed wheat that will be shipped from September to March next year.
China has been Australia's number one export destination for wheat exports in the current 2021-22 export season having already taken 4.2mt and on track to take more than 5.5mt before the season is finished.
Northern grain markets steadied last week with limited activity. Downs barley was unchanged at $390 delivered, sharply down from the highs on $500 set back in May.
Farmers are showing little interest into selling new crop wheat until they become more comfortable with their production outlook. Some farmers in northern and central NSW are just finishing wheat planting, more than a month later than the ideal seeding window.
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