Trade takes positions on the grain market

The wheat quotation on the Matif took a small step back yesterday to €338 per tonne. This means that the price has been fluctuating very close to €340 per tonne for almost three weeks now. The prices on the CBoT show a little more life in that respect. The September wheat contract closed in Chicago last trading session at $8.10,75 per bushel (approximately €289 per tonne). That is a plus of 1,4% compared to the day before. The corn price also took a step up and closed 1,3% higher and soy also rose 1,3%.

Prices on the American stock exchange had the wind at their backs due to the falling dollar rate. Products that are paid for in dollars are therefore more competitive on the world market. However, not much of this is yet noticeable in the American export figures. The weekly export amounted to 359.000 tons, well within the range that the trade expected. In Stratégie Grains' monthly market review, the wheat export forecast for the EU in the 2022/2023 season has been adjusted downwards to 29 million tons. A month earlier, an export of 30,4 million tons was expected. The agency expects that European exporters will face stiff competition this season from Russia, which, according to preliminary reports, is harvesting a good wheat harvest.

Corn crop evaporates
The yield forecast for corn in the EU has been sharply lowered by Stratégie Grains. In July a harvest of 65,4 million tons was expected. That has now been reduced by 15% to 55,4 million tons, the smallest harvest in 15 years. The reason for the significant adjustment in the forecast is the persistent drought in large parts of the EU. Drought also continues to play an important role in America. The southern Prairies and western Midwest have again received no significant precipitation this week. That costs yields in spring wheat, corn and soy in these areas.

The hot and dry conditions create a lot of uncertainty about the expected yields. The big question on many players in the grains market is how the USDA incorporates these latest developments into the Wasde report. It is widely believed that the USDA will mainly reduce potential corn yields. In recent years, the Wasde report has proven that it can give the market a strong push in a certain direction. The August edition in particular carries a lot of weight. Corn and soy prices may react strongly because August is just before the start of the harvest of these crops. In addition, the market has been very volatile, especially in the last six months.