By Yusuf Khan


A roundup of key agricultural commodity markets for the week of March 6-10 by Dow Jones Newswires in London.


GRAINS & OILSEEDS

Grain prices have moved lower in recent days, but volatility is still expected over the next two weeks as the end of the Black Sea Grain Initiative, which allows agriculture exports to be shipped from Ukrainian ports, draws closer.

The deal is due to expire on March 19 and, though markets seem to be pricing in further extensions given falling grain prices, nothing has yet been confirmed.

"Short-term volatility is expected as the Ukrainian grain corridor deal renewal date approaches," the U.K.'s Agriculture and Horticulture Development Board said in a note. "Currently, optimism surrounding the agreement and cheap Russian supplies weighs on prices, though South American weather issues could limit any major losses to grain markets," it added.

The AHDB also noted that between 92% and 97% of Ukraine's winter wheat crop was in good condition although given the war, harvest has fallen--32.2 million metric tons were harvested in 2021, compared to just 20.2 million tons last year.

Another watch point remains the weather in Argentina. Dry forecasts are keeping soybean and soybean futures elevated, Peak Trading Research said in a note. Soybean futures have climbed 2.3% from the start of March according to data from FactSet.

Elsewhere, the U.S. Agriculture Department's World Agricultural Supply and Demand Estimates report is due on Wednesday, while macro drivers such as Fed Chair Jerome Powell speaking to lawmakers Tuesday and nonfarm payroll data later in the week are likely to drive futures, Peak added.

Chicago-wheat futures are down 1.5% to $6.98 a bushel, on Monday while corn is 0.6% lower at $6.36 a bushel.


SOFT COMMODITIES

In terms of softs, sugar markets have pushed higher in recent weeks on the idea that supply might not be as fruitful as first expected. Weather seems to be the most dominant factor in this, diminishing crop estimates, according to Marex's Robin Shaw.

"If rains come in excessive fashion, the water runs off, or causes flooding, and even if overall rainfall is average, there are then longer periods without rain," Mr. Shaw said in a note.

"And China and Europe suffered droughts this year. Not to mention the weather risks still to come, (El Nino perhaps causing drought in Asia, and excess rains during the harvest in CS Brazil)," he added.

Coffee futures in New York were up 0.8% to $1.79 a pound, raw sugar was 0.7% lower at $0.21 a pound while cocoa was 0.6% higher at $2,776 a metric ton.


Write to Yusuf Khan at yusuf.khan@wsj.com


(END) Dow Jones Newswires

03-06-23 1030ET