Turkey Supports 120 Day Extension of Black Sea Grain Initiative, Wheat Prices Gain on Confusion Over Deal’s Extension

Bloomberg writers Aine Quinn and Megan Durisin reported on Tuesday that, “Wheat gained to the highest in a week amid confusion over the terms of renewing a key grain-export deal that allows Ukraine to ship crops from its Black Sea ports.

“Wheat futures traded in Chicago were up about 2% at $6.98 a bushel. Traders are watching to see whether the Black Sea Grain Initiative will be renewed when it expires later this week.”

Quinn and Durisin indicated that, “Moscow offered to extend the agreement for 60 days, but is yet to receive official reactions from all parties, Deputy Foreign Minister Sergei Vershinin said on Tuesday, according to Tass. Kyiv has pushed back on the proposal, saying that it contradicted the terms of the overarching agreement.”

“A 60-day extension would only be half the length of the previous two terms of the initiative, which was brokered by the UN and Turkey last July and extended in November,” the Bloomberg article said.

Dow Jones writer Kirk Maltais reported on Tuesday that, “Wheat for May delivery rose 1.7%, to $6.96 1/4 a bushel on the Chicago Board of Trade on Tuesday with grain traders reducing risk amid uncertainty over bank failures and rhetoric surrounding extension of the Black Sea Grain Initiative.”

Maltais stated that, “Drama around the extension of the Black Sea Grain Initiative is continuing, and traders are aggressively covering their previous short positions in wheat, said AgResource in a note.”

Reuters writer Omer Berberoglu reported on Wednesday that, “Turkey will continue discussions to extend a deal that allows grain shipments from Ukraine’s Black Sea ports for 120 days rather than 60 days, Turkish Defence Minister Hulusi Akar said on Wednesday.

“‘We started negotiations in line with the initial version of the deal. The continuation of the deal is important. We will continue our contacts (regarding its extension for) 120 days instead of two months,’ Akar said according to a statement by the defence ministry.”

And with respect to Ukrainian agricultural production, Reuters writer Pavel Polityuk reported this week that, “Ukrainian farmers, which have already started the 2023 spring sowing, have only around 35% of the herbicides and pesticides they need, analyst APK-Inform quoted on Monday official data as showed.

The Russian invasion has left Ukraine seriously short of finances, seeds and crop protection products, which could have a negative impact on crop yields this year.

“APK-Inform said farmers had 9,356 tonnes of herbicides and pesticides, which is 34.7% of the declared 26,926 tonnes needed for the first half of this year.”

Recall that Ukrainian farmers are also facing continued risks of tank mines in portions of the country.