After the sharp drop in the wheat price last week, the market made another step up in the past trading session. The pressure on the market due to the harvest will continue for a while, according to various analysts. For maize it still takes a while before the harvest starts. American growers are still trying to make their mark there.
The wheat quotation on the Matif showed a cautious recovery yesterday after the sharp decline before the weekend. The September contract gained €8,75 to close at €343,25 per tonne. That is almost €100 lower than the peak in May, but the price is still above the level before the outbreak of the war in Ukraine. The US stock market was closed yesterday for Independence Day celebrations.
The availability of wheat from the new harvest is putting pressure on prices, according to analysts. This effect is also noticeable in Russia. The market agency IKAR lowered the wheat quotation for delivery in the Black Sea ports from $400 dollars last week to $375 per tonne. Sovecon lowered the price by $15 to $375 to $385 per tonne. Sovecon reports that Russia's grain exports reached 250.000 tons last week. A week earlier that was still 500.000 tons. In southern Russia, 30 wheat have been harvested until June 92.000. Last year the counter stood at 117.900 hectares on this date. According to Sovecon, the average yield so far is 2,73 per hectare. A year earlier that was 2,35 tons per hectare. "That doesn't seem like a great yield, but you have to remember that farmers have started harvesting the plots that were hit hardest by the drought earlier this season," Sovecon writes.
Waiting for a better offer
On the CBoT, it is noticeable that corn from the old crop (July contract) is $1,40 per bushel higher than the first contract of the new crop. According to the USDA, farmers still have 14% of the corn from the 2021 harvest in the silos. And according to traders, growers are willing to take a chance on that. The bills have been paid and this stock has been kept in reserve to be able to respond to a possible price increase. According to a Reuters analysis, traders in the physical market are currently offering much higher prices compared to recent years. Other sources report that farmers also say no quite easily if the offer is not suitable. Growers have invested heavily in storage capacity and various companies do not have to be empty before the start of the new harvest. This gives the growers a strong negotiating position.