Weekly US wheat export figures lower than expected

The March wheat contract closed last night at $1.073,75 per bushel (around $359 per tonne). The May contract is now quoted higher than the March contract at $1.087 per bushel (approximately €363 per tonne). The initial contract for the new September crop has been signed at $1.009 per bushel (approximately €337 per tonne) and it gradually declines to $899,75 per bushel (approximately €301 per tonne). According to analysts, the wheat price has risen sharply after the invasion of Ukraine, too fast for the physical market to keep up with developments.

The maize and soya quotations show a much more moderate trend in this respect. Corn and soy are both closed higher than a day earlier. Corn is on the CBoT at $757,75 per bushel (about €271 per ton) and soy is at $1.700 per bushel (about €568 per ton). The prices of both crops are therefore well above the level of more than two weeks ago. Only the price has risen without the extreme spike we have seen in the wheat market. It goes without saying that Russia and Ukraine are mainly major suppliers of wheat to the world market and less of maize and much less of soy. The fact that the price of maize has taken such a big step is not only due to the war, but also due to, for example, good demand from China and disappointing cultivation conditions in South America.

European Union is in demand
If we go back to the wheat market, it was the export figures that the US Department of Agriculture USDA published last night (Dutch time) that left a strong mark on the market. Wheat exports were at the lower end of what trade expected. The demand for American wheat is lower than what the market had previously assumed. Analysts assume that it will be the EU and especially France that will fill the orders that are normally filled with wheat from Ukraine.  

Ahead of the new crop in the US, some experts are beginning to worry about the drought plaguing the southern prairie states. Some sources report that there is now damage to the cereal crops. If rain falls quickly, the loss of yield will be limited, but it doesn't look like that. It is of course still very early to make predictions about yields, but a report like the one from the FAO earlier this week that grain yields will be higher this season because farmers can invest more in cultivation, is very short-sighted. Of course, a cost-benefit consideration plays a role in the decisions that are made during cultivation. But the weather continues to play a role that should not be underestimated and is perhaps the most important factor determining the final yield.