Germany is likely to become a net importer of grains this year. This while the country is usually one of the largest exporters in Europe. Last week there was also a revival in the soy and maize markets.
The fact that Germany is becoming a net importer of grains is due to this summer's drought. The German Ministry of Agriculture announced in August that the grain harvest will be almost 16% lower than last year; feed raw materials (such as soy) in particular will have to be imported.
Many offerings from South America
The price of soybeans rose sharply last week, which was mainly due to bargain hunters. In addition, the sale of almost 700.000 tons of soy from the United States (US) to Mexico was also a factor supporting the price. Regarding the supply, it can be said that there is a lot of supply from South American countries.
The Brazilian harvest of soybeans is likely to reach a record of over 120 million tons, shattering last year's record by 1 million tons. The Argentine harvest is also large (53 million tons), compared to the 2017/2018 season (35 million tons). It is true that a large part of this supply will go to China (due to the trade war with the US).
Revival of corn prices
The corn quotation (Matif in Paris) showed a revival last week and reached a price of more than €177 per tonne. That is the highest level since week 37. In addition, the corn quotation on the CBoT in Chicago reached the highest level in 1 month. It has to do with the persistent wet weather in the important harvest areas, which limits work around the harvest.
Argentina is also expected to have a good to very good harvest in the 2018/2019 season. The wheat harvest in the country is likely to reach around 20 million tonnes, compared to almost 2017 million tonnes in the 2018/18 season. The corn harvest is also expected to be 11,3 million tons larger than last year, bringing it to around 43 million tons.
Wheat market is wait-and-see
The wheat price continues to fluctuate slightly above €200 per tonne (Matif). The market appears to be awaiting a new report from the USDA (the United States Department of Agriculture), which will be published on Friday, September 28.
In addition, the situation in Russia and Ukraine is also being closely monitored. The latter country is expected to have 42 million tons of wheat available for export. This means that the country surpasses Russia, because that country has 36 million tons available.