One has to smile when, within the space of two hours, we get diametrically opposed statements from “officials”; this time Ukraine where Reuters reported at 11:30 today  “There will be a full ban from Nov. 15. There will be a government order about this. We are not playing games here. We do not have any other option,” Farm Minister Mykola Prysyazhnyuk told Reuters. Within a very short period of time we hear that the Prime Minister says, “No!” The key to keep in mind is that the 5 million mt cap on exports is in place and the possibility of any export volume over and above that now seems extremely remote indeed.

A major topic of discussion arising from the export limit and whether or not it is “official” is the ability of traders to declare force majeure on contract tonnages over and above the “cap”. A formal ban and a set date will make it abundantly clear and buyers will have to find alternative supplies at market price with no recourse to sellers for any price differential. It is likely that the world’s largest buyer, Egypt, will be caught in this scenario as they have tonnages purchase beyond the 15 November deadline.

The key to prices going forward now is not so much related to the Black Sea region but more to what output will we see from Australia and Argentina and at what price will we see the US become a willing exporter.

Both corn and soybean basis levels remained firm throughout the day and we saw evidence of further soybean export sales by the US with another 100,000 mt plus sale announced today to an “unknown” destination. Even after recent price rises we see no evidence of the much needed price rationing kicking in and slowing the pace of demand, which can only exacerbate problems later in the season.