Weather puts a limit on corn and soy prices

Wheat prices have taken another step back in the past trading session. On the Matif, the September contract closed at €327,25 per tonne. The wheat contract on the CBoT gave up 2,9% to close at $7.63,25 per bushel (approximately €276 per tonne). Corn and soy were cautiously up in Chicago. Corn closed 0,6% higher and soy rose 1,4%.

Exports from Ukraine are causing pressure on the wheat market. On Wednesday it was announced that five ships are on their way to the port of Chernomorsk. These ships will be loaded with 70.000 tons of wheat, corn and sunflower oil, the Ukrainian port authority said. The five ships are the largest convoy underway under the grain deal to date. India released a new wheat yield forecast yesterday (Wednesday, August 17). The trade expected a downward adjustment due to a heat wave in the country. However, the Indian Ministry of Agriculture adjusted the expected yield slightly upwards. The ministry now expects a harvest of 106,84 million tons. In the previous forecast, India expected a harvest of 106,41 million tons.

Climate laws
Corn received a boost from President Biden's American climate legislation. Tax measures encourage companies to capture and store CO2. This indirectly affects the corn market. The production process of ethanol - which can be made from corn, among other things - is suitable for capturing CO2, according to experts. By capturing CO2 during ethanol production, producers can market ethanol as a green fuel and thus provide a serious counterbalance to electrification, which is currently being promoted.

However, the increase in corn and soy prices remained limited due to weather forecasts. For dry areas in the western Midwest, models predict rain in the coming days. This improves potential returns.