Asia emphatically stirs up grain market

Wheat prices on the CBoT fell 4% last night to $1.014,25 per bushel. This translates to approximately €334 per tonne. The price of corn also fell, by almost 3%, due to the moderately optimistic sounds about the negotiations between Russia and Ukraine. Analysts estimate the chance of a ceasefire in the short term to be quite high. 'Objectively speaking, both countries cannot afford a prolonged armed conflict' is an argument that is often mentioned.

The above does not alter the fact that concerns about the consequences of the war on grain production remain great. Gas oil, fertilizer and seeds are available in limited quantities in Ukraine. Not to mention damage to infrastructure and other indirect consequences that affect the agricultural sector and related companies.

Egypt is looking for alternatives
Egypt - which is one of the largest wheat importers in the world and largely dependent on the Black Sea region - is looking for alternative suppliers. France announced this week that it may export additional wheat to the North African country. Reuters news agency announced - based on a government source - that India also wants to lend a helping hand. In the first week of April, a delegation from Egypt will travel to India to explore options.

Egypt can import up to 12 million tons of wheat from India. “India is in a position to supply top quality wheat that meets Egypt's quality requirements,” the anonymous source told Reuters.

China is taking measures
China is taking various measures to control the internal grain market. For example, this week it put 500.000 tons of soy from strategic reserves on the market to reduce the domestic price. Today (March 20) the central bank announces that it will adjust monetary policy. The bank takes, among other things, measures to provide additional support to rural areas and financial support to safeguard food security.

And then there is even more at play on the grain market. The U.S. Department of Agriculture (USDA) rates 32% of Kansas winter wheat as “good” or “excellent.” One week earlier that was still 25%. On the other hand, winter wheat in Oklahoma and Colorado has deteriorated in quality. Rain is forecast for the southern plains, but meteorologists predict the rain will not pass over regions hit hard by the drought.