Granenmarkt focuses on the weather again

Nu the American presidential elections have shifted slightly to the background, the global grain market is focusing again on the weather. Wheat trading on the CBoT opened at $9 per bushel on Monday, November 6,02. This means that the price has fallen considerably in a few days, because halfway through last week it was still at $6,09 per bushel. The listing has been affected by a backlog of winter wheat plantings in the United States. Currently, 89% of the area has been sown, while that is usually 91% during this period of the year. Last week, the rate rose as much as 4% as snow and rain in the Southern Plains disrupted efforts. On the other hand, the quality is positive, with 43% in the good to excellent category.

Not only is the sowing of winter wheat behind schedule, the harvest of corn and soybeans is also slower than expected. The Crop Progress report estimates maize harvest progress at 82%, which is 1% less than expected by the trade. Here too, the weather disrupted the planning, resulting in only 10% being harvested last week. The soybean harvest is going even slower due to the worse weather, with 87% now harvested. This is 4% less than previously estimated.

Wheat prices on Matif also down
It is striking that the wheat quotation on the Matif in Paris also shows a decline. A drop in the price of the dollar usually makes it attractive to buy products sold on the market in US currency. It appears the market is preparing for the release of the US Department of Agriculture's WASDE report. The expectation is that the harvest forecasts for the Black Sea region will be adjusted. For example, in northwestern Ukraine, late-sown wheat is lagging behind. This leads to uncertainty, because frost is predicted in a few weeks.

What also plays a role in the decline in wheat prices on the Matif is that global wheat exports remain mediocre. There are already signs of recovery visible here and there, but this is not yet enough to boost wheat, corn and soy prices. Russia remains the 'export leader' worldwide, but that dominant role is expected to be tested this season due to production problems in the country. It remains to be seen how that will turn out.

China disappeared from the radar
One country that significantly influenced the grain market last week is China. China has been clearly visible in the US soybean market for a long time, but in recent weeks the country has been buying virtually nothing. Last week it purchased 'only' 132.000 tons of soybeans from the United States, according to figures from the US Department of Agriculture. It appears that China has been able to meet most of the short-term needs. However, overall exports have not decreased, exports to other countries have increased. For example, a non-specified destination purchased 272.150 tons in the above period.

The weather also affects the soybean market. Due to the dry and warm weather forecasts in Brazil and Argentina, growers have accelerated when it comes to sowing. Progress is therefore taking a giant step: from 16% last week to 35% this week. As a result, analysts have increased Brazil's soybean harvest to 133,5 million tons. The previous expectation was 132,2 million tons. The quotation on the CBoT in Chicago drops to $10,98 per bushel.

The same weather forecasts also influence the global corn market. Due to the lack of rain, sowing of the area has stopped. In addition, the market was supported by China, which emphatically presents itself as a buyer on the market. A Chinese official said the country needs to import as much as 17 million tons of corn to meet domestic needs. And right now it makes sense to buy American corn because it's the cheapest in the world. The price of corn in China itself is more than $9, while the price of corn in Brazil is $6,13. On the CBoT, corn is listed at $4,06 per bushel.