New lockdowns, the US presidential election and the uncertainties about supply and demand. These are topics that have had an influence on the grain market in recent times. While a sharp rise was visible in recent weeks to record high prices, the quotations are now plummeting.
Quotations for maize, soybeans and wheat have fallen sharply as a result of the uncertainties in the market. The main reason for the negative sentiment is concern about the economic impact of the many corona infections in both Europe and the United States. In both regions, the number of cases has risen sharply in recent weeks, after which governments are introducing new measures. For example, restaurants in Germany and the Netherlands are closed and France is once again under lockdown.
In addition, the upcoming presidential elections in the United States (on Monday 3 November) will affect the grain markets, mainly because the outcome is difficult to predict. It causes a lot of selling movements in various markets, including the grain market and the stock market.
Heavy losses
On the grain market, the above leads to heavy losses in wheat, maize and soybeans. For example, the wheat price on the CBoT Monday October 26 still $6,20 per bushel (a level well above the 5-year average), but the quote fell to $28 per bushel on Wednesday, October 6,08. Also on the Matif in Paris has shown a decline in the past few days. Between October 26 and October 28, this quotation fell by more than €3 to €204 per tonne. Another factor here is that the situation in the Black Sea region has improved and that sufficient rain is forecast in the American winter wheat areas.
The CBoT quote for soybeans has fallen this week from $10,87 to $10,57 per bushel. Egypt's order of 110.000 tons of American soybeans has not prevented that price drop. Incidentally, the downward trend in soybeans is not really a surprise. This was also predicted last week, as China is no longer a consistent buyer (compared to previous weeks). It looks like the country has stocked up enough for now. It does, however, lead to some uncertainties regarding supply and demand.
That said, US exports do show exceptional figures. To date, more than 76% of the expected US soybean exports exported, a record for this period of the season. In addition, the harvest is ahead of previous years. One week ago, 75% of the soybeans had been harvested, compared to 61% the week before. The average for this period is even only 58%.
Also in maize everything revolves around China
The maize market has also been centered around China and the demand from that country in recent weeks. The country has reportedly imported more than 10,5 million tons of corn from the United States, compared to 60.000 tons last year. Last week South Korea imported 207.000 tons. However, here too good export sales were unable to resist the uncertainties in the market. The corn quotation on the CBoT has fallen to $4,01 per bushel in recent days. On the Matif, the price went down to €195,25 per tonne.