It has been quiet weeks on both the physical market and the futures market. Despite the fact that the sowing of winter grains does not go well everywhere, there is little noticeable difference. Harvest figures are permanently adjusted upwards. What does this mean for the market?
The United States Department of Agriculture (USDA) has increased the global wheat harvest by 6,3 million tons, to 751,2 million tons. Less than last year, when 754,2 million tons were harvested worldwide. Yet it does not move prices.
Good global harvest
The wheat stock is expected to increase by 5 million tons to more than 268 million tons. Based on daily world consumption, this supply is good for 132 days. According to the USDA, China stocks half of all wheat. The harvest has been particularly positive in the EU, India, Canada and Russia.
For Russia this means 83 million tons of wheat, the Americans calculate. In order to be able to export this enormous stock, parliament must make a decision on awarding transport subsidies.
Sowing US not ideal
The 2017-2018 growing season is not off to an ideal start in the United States. The weather conditions are wet. According to analysts, three quarters have now been sown, compared to 80% on average and 78% last season. In Russia and Ukraine it is very dry. The wheat could use some rain. However, these concerns are not enough to move the market.
The futures market in Paris has been moving sideways for wheat for 2 weeks. On Tuesday, October 10, the Matif reached a temporary high of €163 per tonne. Exactly 10 days later the low point was reached at €161,25 per tonne. The turnover, totaling more than 141.000 contracts, is also nothing to write home about.
Chicago remains quiet
There are also few spectacular numbers to be seen on the CBoT. Much more trade was concluded here, with more than 564.000 contracts. Yet that level is not remarkable. On October 20, the rate reached a level of $426 per 5.000 bushels. The high, on October 23, was $10 above that.
Physical market mirrors TM
Physical trading mirrors the futures market. In weeks 41 and 42, Groningen recorded €162 per tonne. Middenmeer was €2 below that. Goes came to €145 for feed and €150 for milling wheat. Emmeloord is the exception and recorded a reduction of €1, to €159,50 per tonne. The highest known transaction is €163 in the Oldambt.
Significantly less exports
In the period between October 11 and 17, more than 1 million tons of grain were exported. This volume consists of 665.225 tons of soft wheat and 188.782 tons of barley. In addition, 481.973 million tons of grain were imported. This mainly concerns corn: 391.248 tons. According to the customs system, the EU exported a net 2017 million tons of grain in the 2018-2,7 season. In the same period last season this was 8 million tons.
Between July 1 and October 17, 8,68 million tons of grain were exported. The year before that level was 3,3 million tons higher. More than 30% less wheat has been exported, compared to 4% more barley exports. Corn imports are 50% higher than last season. 4,28 million tons compared to 2,42 million tons last year. Not all figures have been processed yet. Final volumes may vary.