News

Ukraine backs out of Black Sea Grain Deal talks, economist says

An ag economist says Russia and Ukraine nearly reached a new Black Sea Grain Deal last month, but the agreement fell through.

Jim McCormick with AgMarket.Net says reports indicate Ukraine backed out of the proposed initiative, which would have allowed the country to resume exporting ag goods through the Black Sea Region.

“If they would have been able to cut a deal, it probably would have made it a little bit easier to get stuff moved,” he said. “The other problem the Ukrainians are dealing with there is a certain amount of tension of moving their wheat not out to the Black Sea, but in essence into Europe.”

He tells Brownfield there are concerns Russia will now target Ukraine’s grain infrastructure. “If the Russians believe they’re not going to get control of Ukraine, I think they could really go after that grain exportable infrastructure.”

McCormick says the overall world wheat prices are depressed compared to the break-even costs of farmers in the U.S. “You’ve got a war going on in one of the best grain baskets of the world, and at the moment at least, the market just does not seem like it has a whole lot of war premium in it.”

He says Turkey was helping broker the recent export negotiations.

AUDIO: Jim McCormick, AgMarket.Net