Wheat quotes on international exchanges have closed marginally lower in the past trading session. Corn and soy in particular are gaining momentum. Fundamentally, not much has changed in the grain market. So why the differences?
The wheat price on the Matif yesterday amounted to €398,50 per tonne. That is €1 lower than the day before. The contracts for the new harvest fell even faster. The September contract yielded €4 to reach €361 per tonne. The May 2023 contract was closed at €352 per tonne, a decrease of €3,25 compared to the previous closing quotation. On the CBoT, the wheat contract closed up 1% at $1.088 bushel (approximately €366 per tonne). Corn closed at $815,75 per bushel (approximately $294 per tonne) on the CBoT. This brings the corn price very close to the highest price in the last ten years.
According to analysts, the fall in the wheat price can largely be attributed to players taking their profits and parties exiting based on technical analysis. The high dollar rate together with signals that the market overbought would be, created extra will to sell at the CBoT. Although the daily price of wheat has fallen somewhat, not much has fundamentally changed. It is dry in the US and the war in Ukraine continues to cause a lot of uncertainty.
Smaller area
Argentina's grain exchange yesterday released a new acreage forecast for wheat. For the 2022/2023 season, the fair organization expects that 6,5 million hectares of wheat will be grown in Argentina. That is 100.000 hectares less than in the previous forecast. Serbia feels forced to take additional measures due to the tight grain market. The country's government announced yesterday (Wednesday, April 20) that it would impose export restrictions on wheat, corn, flour and edible oils. Serbia is forced to take this step to cope with disruptions in the local and international markets. The EU's wheat exports are ongoing, despite the developments of the last two months on the European continent. The counter for the 2021/2022 season so far stands at 21,26 million tons. In the same period last year, the amount of wheat exported was 22,08 million tons.
The American corn market is mainly affected by the progress of the sowing season. Due to the cool and/or wet weather in the Midwest of the US, the season is getting off to a slow start. The ideal sowing date in the area is somewhere between mid-April and May 10. Sowing later costs yield, just like sowing early if the soil temperature is too low. In a market that is already tense due to relatively tight supplies, a lower corn yield expectation immediately causes a reaction on the market. In the soy market, optimism about demand development is the driving force behind the rising price.