The grain market showed a mixed picture over the past trading session. The wheat price took a step back in both Chicago and Paris. Soy and corn, on the other hand, closed higher. It seems that the weather has less influence on the market at the moment. However, that could also be caused by the WASDE report that will be published tonight.
The September wheat contract on the Matif closed yesterday at €352,50 per tonne. That is €4,50 lower than before the weekend. On the CBoT, the September wheat contract actually fell 4% from its previous closing price. Corn and soy closed marginally higher on the US stock market. This surprised some analysts.
The USDA's Crop Progress report released yesterday contained no surprises per se, but the weather in the US Midwest is not cooperating for a peak yield. A period of warm and dry weather is forecast. If that prediction comes true, it will cost tons of maize and soya. The maize enters the flowering period and during flowering the ultimate yield of the crop is determined to a large extent. The winter wheat harvest in the US continues at a steady pace. 63% of the harvest is in. Last week the counter was still at 54%.
Harvest forecast
Russia seems to be heading for a very good wheat harvest. In the south of the Rostov region, yields are 0,1 to 0,2 tons per hectare higher than last year, Reuters reports citing local sources. In the west of the region, yields are lower and comparable to last year due to a lack of rain earlier in the growing season. Western sanctions do not cause major problems with the harvest in Russia. Many farmers work with locally produced tractors and combines. Parts are still available. It is more difficult for growers who work with western machines to get parts. Despite the challenges, we managed to get 99% of the machinery ready for harvest through detours or improvisation.
Tonight (Dutch time) the USDA will publish the Wasde report. Traders and speculators have already partly taken their positions on this. According to some analysts, this explains the limited increase in corn and soybean despite the bullish weather forecast. It is of course not yet known which direction the Wasde report will take the market, but various sources believe that the grain market remains tight. The recent dip in grain prices may have started a buying wave in the grain market.