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Grain deal puts downward pressure on markets, ceasefire dependent on ag sanctions

A marketing analyst says futures have been negatively reacting to the possibility of a renewed Black Sea Grain Deal.

Angie Setzer is the co-founder of the grain marketing firm Consus.

“When Russia wasn’t getting their way, they then said, okay, we’re pulling out,” she explains. “That was November of 2023. Initially, everyone thought that that may disrupt the flow of grain out of the region pretty badly, but Ukraine worked with its allies to open up their own corridor of sorts.”

The U.S. announced it had reached agreements Tuesday with Russia and Ukraine separately that would pause attacks in the Black Sea region. Part of the meetings between the U.S. and the Kremlin include commitments to restore Russia’s access to the world market for ag and fertilizer exports. Russia is also calling for sanctions on a major bank supporting the country’s ag industry to be lifted.

“Having access, or being told that they have better access, to the world market may not be something that you see actually change when it comes to supply and demand as we move forward,” Setzer speculates. “If we were to see this come into play, it would be an impact on the Ukraine grain flow if Russia wins their way.”

Following the meetings, Ukrainian President Zelenskyy said that Ukraine did not agree to the added concessions.

Setzer says this week there’s a trifecta for uncertainty for traders when considering the potential for additional port fees in the U.S., USDA Prospective Plantings and Quarterly Grain Stocks reports, and tariff ‘Liberation Day’ on April 2nd.

Overnight, Ukraine says a major port with access to the Black Sea underwent a large drone attack.