The mood in the grain market remains nervous. The commodities market in general took a hit yesterday after the news that China announced a lockdown in Shanghai. China is thus trying to curb the rapidly increasing corona infections.
The May contract for wheat on the Matif closed on Monday 28 March at €369,75 per tonne. That is €11,50 lower than the closing price of Friday, March 25. In addition, the contracts for the new harvest have also taken a step back. On the CBoT in Chicago, wheat prices fell 4% compared to before the weekend. The prices for corn and soy also took a step down.
The commodities market reacted strongly to developments in China on Monday, although this decline is not too bad if you compare it with oil. Brent crude oil lost $10 per barrel. The fear of a new and/or further disruption of world trade due to the coronavirus is now back. The course of the war in Ukraine is also an important factor. A new round of negotiations between Russia and Ukraine has just started - after two weeks. Both sources around the Kremlin and Zelensky have tempered expectations. It is becoming clearer that both parties want to make concessions.
Traders find alternatives
Players on the global grain market are increasingly successful in finding alternatives to grains from the Black Sea region. The French Finance Minister has announced that France will ensure that Egypt receives enough wheat for the coming months. In the meantime, grain exports from Ukraine are slowly getting underway. APK-Inform reports that the first corn is being transported to Europe by train, now that the ports on the Black Sea are blocked.
In the United States, analysts are also anticipating the area expectations that the United States Department of Agriculture (USDA) will announce on Thursday, March 31. Due to high fertilizer prices and uncertainty about security of supply, it is expected that more soy will be grown and that this expansion will mainly be at the expense of the area of corn.