The grain market has shown a mixed picture over the past trading session. In America, the weather forecast rules the market. In Europe, the eyes are more focused on the development in Ukraine and in Germany drought causes problems with the transport of grain.
The quotations of wheat, maize and soy have lost a bit on the CBoT. On the Matif, on the other hand, the wheat quotation showed a small plus. The September wheat contract closed in Paris yesterday at €337 per tonne. That is €1,25 higher than a day earlier. US quotes showed a marginal decline. Wheat fell 0,3%, corn 0,8% and soybean 1%.
Corn and soy prices are under some pressure due to more favorable weather forecasts. As in Europe, the Midwest is warm and dry. Rain is forecast in parts of the Midwest for next week. If that rain actually falls, it will boost the yield potential of maize and soy. The Crop Progress report from the US Department of Agriculture (USDA) is also still working on the market, according to analysts. The ministry did not make any major adjustments to the condition of the crops, while some analysts were counting on it.
The fall in the wheat price, according to analysts, was caused by the withdrawal of a tender from Egypt. The Egyptian state purchasing agency GASC recently launched an international tender for wheat. The specifications were slightly different from normal, for example the protein content was adjusted. According to analysts, this was done to make the tender interesting for American suppliers. However, GASC has decided to withdraw the tender without buying any wheat. The prices subscribed to were a lot higher than what the agency was counting on.
Low water level
In Europe, grain transport on the Rhine seems to be becoming a problem. Due to the warm weather and a lack of precipitation, the level in the river south of Duisburg has dropped considerably, so that ships with smaller loads have to sail. According to the Wasser- und Schiffahrtsamt (the German Directorate-General for Public Works and Water Management), ships can currently only be loaded for 50% to 30%, depending on the type. Due to the low water levels, shipowners have the contractual possibility to cancel transports if they expect to be unable to sail safely. Due to the problems with transport on the Rhine, freight rates are rising.
Russia is ready to reopen the ports on the Black Sea. President Vladimir Putin said this during a press conference during his visit to Iran. Putin does, however, attach conditions to this. Restrictions on Russian grain exports must be completely off the table. According to Putin, not all points have yet been resolved to resume grain exports, but the fact that negotiations are progressing is already a good sign for the president, he said on Tuesday.