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Technical analysis July 27
Wheat prices on the CBoT and the Matif closed in the plus over the past trading session. In Paris, the price increased by 3,8% and closed at €344,50 per tonne. The CBoT came in at $8.04,75 per bushel or up 4,6%. Uncertainty about grain exports from the Black Sea region continues to weigh heavily on the wheat market. Over the weekend, Russia launched a missile attack on Odessa. Yesterday the port of Mykolaiv was bombarded. The Kremlin emphasizes that the attacks are aimed at military targets and that grain exports can be resumed as usual. However, many parties doubt this.
The wheat market is on edge and last week's decline in prices was exaggerated. Fundamentally not much has changed. Moscow was already able to export grain - albeit with some difficulty due to payment sanctions - and the situation for Ukraine remains precarious with or without a grain deal. Grain importing countries are increasingly turning to Western Europe for wheat, among other things. According to sources, traders have bought seven shipments totaling 300.000 tons of French wheat bound for Pakistan. Analysts see this as a sign that buyers do not trust the security of supply of Black Sea wheat.
Corn and soybean prices were also on the rise. Corn closed on the CBoT at $5.97 per bushel and Soy at $15.32,75 per bushel. Dry and warm weather lays a solid foundation for the market. The condition of these crops in the US was already revised further down by the USDA earlier this week. In the past trading session, the market reacted strongly to the weather reports. Temperatures will rise further in the coming days in the Midwest and on the prairies, according to the meteorologists. Corn is now in bloom and soy forms the pods, which is a crucial period for crop development and ultimately yields. A hefty weather premium is now being priced for this.
Jurphaas Lugtenburg
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