Prices on the grain market moved sideways last trading session. Ukraine, preliminary harvest figures and economic developments are sending conflicting signals. Players in the market struggle how to balance those factors.
Quotations on the grain market took a step back in the past trading session. The September wheat contract closed yesterday on the Matif at €337 per tonne. That is €2 lower compared to the close a day earlier. The wheat price lost 1% on the CBoT. That is the fourth day in a row that the wheat quote on the CBoT has closed lower. The prices of corn and soy have remained almost the same on the US stock exchange.
Due to the sharp drop in wheat prices compared to a few months ago, the demand for wheat is picking up. For example, analysts have adjusted the size of the grain tender that Algeria had outstanding by more than 40.000 tons. The physical market for French wheat remains tight, according to analysts. As a result, there is a solid foundation in the wheat market. The progress in the wheat harvest is now putting pressure on the market. Growers and traders want to quickly sell some of the wheat that is being harvested now. This is a common phenomenon.
Contradictory signals
The further development of the wheat market will partly depend on how the situation in the Black Sea area develops. A ship with corn has left Odessa in the meantime, but otherwise it remains anxiously silent with new departures. The yield figures are also an important factor. According to the provisional figures, the wheat harvest in France is not easy. For Romania, the yield is about 25% lower compared to last season, when a top yield was achieved. The Deutscher Bauernverband assumes a wheat yield for Germany that is 1% higher than last year.
Corn and soybean quotes on the CBoT are currently governed by weather reports. The maize has almost finished flowering and the pods are placed in soy. For part of the Midwest, the weather forecast is favorable for the growth of these crops. Onions have been forecast in parts of the area, the high temperatures forecast earlier this month have softened somewhat.
In a broader sense, there is concern among traders and analysts about economic expectations. Inflation remains high and the geopolitical developments surrounding Taiwan are hardly reassuring. This puts a brake on the rise in raw material prices in general and therefore also has an effect on the grain market.