The world wheat market is waiting for the Russian Federation's decision to extend the grain agreement

The grain agreement was concluded by the UN with the Russian Federation and Ukraine through the mediation of Turkey on July 22 for 120 days, and its validity period ends on November 19. If neither party announces a cancellation, the agreement is automatically extended for another 120 days. Ukraine insists on the extension of the agreement, while the Russian Federation puts forward new conditions, which negatively affects world wheat prices and complicates supply planning.

According to the Financial Times, the negotiators believe that Ukraine and the Russian Federation will agree to extend the agreement after reaching a compromise on the supply of Russian ammonia and making payments through Russian banks.

In exchange for agreeing to extend the validity of the agreement, the Russian Federation plans to use the pipeline for pumping ammonia, which passes through Odessa. Before the war, it transported 2.3 million tons of ammonia, so the resumption of its work will bring the Russian Federation an additional $2.4 billion in profits. However, the Ukrainian authorities are trying to ban the sale of fertilizers to Russia, especially since it receives only $100 million a year from the use of the pipeline.

In addition, the Russian Federation requires the USA and the EU to lift sanctions against Rossilhospbank, which is currently disconnected from the SWIFT system. However, the FT's sources report that the US would rather help establish Rossilhospbank's correspondent relations with American banks than re-connect it to SWIFT.

Recently, Reuters sources also reported on Russia's demand to restore Rossilhospbank's access to SWIFT, which would allow Russia to receive payments for grain and other food. The Deputy Head of the Russian Ministry of Foreign Affairs, S. Vershinin, reported Russia's readiness to resolve this issue, as the bank provides the majority of transactions related to agricultural operations. The representative of the Ministry of Foreign Affairs of the Russian Federation, M. Zakharova, said that Russia expects the UN to take steps to remove obstacles to the full export of Russian fertilizers and grain.

Bloomberg sources also report Russia's readiness to extend the grain agreement, but it is not known whether Moscow will insist on introducing new conditions into the text of the agreement. The press secretary of the President of the Russian Federation, D. Peskov, said that Russia would announce its decision "in due time", and the UN said that negotiations are still ongoing.

The head of SovEkon believes that the agreement is likely to be continued, and Lavrov, referring to Guterres, talks about some new written guarantees from the EU and the US that Russian grain and fertilizers will not fall under sanctions.

Yesterday, wheat quotations on world exchanges decreased somewhat:

• by 1.3% or $3.95/t to $300.4/t - December futures for soft winter SRW wheat in Chicago (-5.2% for the month),
• by 0.8% or $2.76/t to $351.1/t - December HRW hard winter wheat futures in Kansas City (0%).
• by 0.9% or $3.12/t to $354.8/t - December futures for HRS durum wheat in Minneapolis (+1.2%).

December futures for Black Sea wheat in Chicago remained at $318.25/t (-3.5%).

December wheat futures on the Paris Euronext rose by 0.1% or 0.25 €/t to 319.75 €/t or $331.7/t (-8.3%).

According to the European Commission, in 2022/23 MYTD wheat exports as of November 13 increased by 9.5% to 13.35 million tons, most of which were shipped to Algeria, Egypt and Morocco.