Wheat prices on the international exchanges have taken a step back in the past trading session. The US Department of Agriculture's acreage and inventory figures for wheat were reasonably close to trade expectations. Nevertheless, the figures elicited a strong reaction from the market.
The September wheat contract closed yesterday on the Matif at €350,25 per tonne. That is €8,25 lower than the closing price the day before, but still €0,25 higher than on Monday. On the CboT, the price of the July contract fell to the lowest level since February 27, closing at $8.68,75 per bushel (approximately €305 per tonne). It should be noted that trading in the July contract is almost over.
The September contract stands at $8.84 per bushel (approximately €311 per tonne) and that increases to $9.15,75 per bushel (€320 per tonne) for the March 2023 contract. On the Matif this is the opposite and the price for the contracts decreases to €337,50 for the last contract for the 2022 harvest. In the American market, the price-pressing effect of the new harvest becoming available is more pronounced than in the American market. Europe. That partly explains this difference.
The USDA's quarterly acreage and inventory report contained few surprises for wheat and corn yesterday. The area of maize has decreased compared to last year and the area of wheat has increased. The USDA has not made any major adjustments compared to the March edition of the report. The USDA thus sends a neutral signal. This is different with soy. The acreage was reduced by 2,6 million acres from the March report to 88,3 million acres. This is still an expansion compared to last season by 1,2 million hectares. But due to the relatively smaller area, the market is sensitive to yield forecasts and weather conditions. The USDA does note that the data was partly collected when sowing on the northern prairies had not yet been completed due to wet conditions.
Loads too small
Although there is little progress in talks about resuming grain exports from Ukraine (and there is still a considerable amount of grain from the old harvest in storage there), wheat from the new harvest is already being offered in Asia. The Ukrainian wheat is offered for approximately $390 per ton Free on Board, Reuters news agency reports based on two grain traders from Singapore. The grain is then shipped in batches of approximately 25.000 tons via the Romanian port of Constanta. For transport over long distances and given the relatively high freight prices, these are too small batches that are offered. A small bulk carrier easily carries two to three times as much grain. There is therefore only limited interest among Asian processors in wheat from Ukraine. Australia has an advantage, partly due to its favorable location.
The grain harvest in Ukraine has only just begun. In the south and east, approximately 1% of the area has been threshed, the Ministry of Agriculture announced today. The average yield so far is 2,23 tons per hectare. This makes the Ukrainian ministry one of the few to immediately provide yield figures. From the US, for example, the USDA announces the harvest progress weekly (42% of the winter wheat had been harvested on Monday) and FranceAgriMer reported today that 5% of the grain harvest has been harvested. But little or no information is given about the proceeds.