Grain exports are struggling to get off to a good start this new season. This isn't just affecting European exporters. In Russia, the wheat yield is slightly better than previously expected, according to SovEcon's forecast. US President Trump has also made his voice heard again. A deal with India is a long way off, and the White House's shift in attitude toward the Kremlin is also playing a role.
The September wheat contract on the Matif closed yesterday up €1,50 at €198,25 per tonne. On the CBoT, wheat closed 6 cents lower at $5.23¾ per bushel. Corn rose 2½ cents to $3.91¾ per bushel. Soybeans were the biggest loser, closing 1,4% lower at $9.67¾ per bushel.
SovEcon has raised its wheat yield forecast in Russia by 600.000 tons to 83,6 million tons. This is in line with the USDA's forecast of 83,5 million tons. SovEcon has also revised its export forecast upward by 400.000 tons to 43,3 million tons. This leaves SovEcon below the USDA's forecast of 46 million tons. Meanwhile, the harvest is continuing steadily in Russia. According to Russian media, 50 million tons of grain have already been harvested.
Slow exports
The Ukrainian Ministry of Agriculture has kept its wheat harvest estimate unchanged at 20,7 million tons. According to the ministry, 2,2 million hectares of wheat have been threshed out of the more than 5 million hectares cultivated in the country. Grain exports are yet to really get going in the new season, which began on July 1st. In total, the country exported 1,3 million tons of grain, compared to 3,4 million tons in the same period a year earlier. Wheat exports, at 487.000 tons, are 66% lower than last season. The largest export product is corn, at 613.000 tons. This is 59% less than last season. Due to warm weather and a lack of rain, the corn harvest in Ukraine could be 2 million tons lower, according to the growers' association. Instead of 30 million tons, this would mean a harvest of 28 million tons. Dry weather is currently absent throughout Ukraine. Showers have fallen in the west, causing the wheat harvest to temporarily come to a standstill.
Moderate grain exports are also a characteristic of the new wheat season in the EU. Up to and including July 27, the EU had exported 803.000 tons of wheat, compared to 2,25 million tons a year earlier. Nigeria, Algeria, and Saudi Arabia are the main buyers, but none have yet surpassed the 1 million tonne mark.
New connections
India has imported a record amount of soybean oil from China, Reuters reports. According to Reuters sources, India reportedly purchased 150.000 tons of soybean oil from Chinese processors. The Chinese are offering the soybean oil at a competitive price, below the price of oil from South America, India's traditional soybean oil supplier.
India is also a hot topic for the US president. Trade negotiations have stalled, and Trump announced a 25% tariff on Indian goods starting Friday. One of Trump's sore points is India's stance on Russia. Trump is taking a tougher line with the Kremlin and now appears to be upset by the fact that India is importing cheap Russian oil despite sanctions.