Grain market reaction to Russia a bit too intense

The September wheat contract on the Matif closed yesterday at €320,50 per tonne. That is €5,75 lower than a day earlier. On the CBoT, the wheat contract closed 1,9% lower from the closing price. Corn closed marginally lower on the US stock exchange, while soy received a minor plus.

The fall in the wheat price is largely attributed by various analysts to Putin's statements about the grain deal with Ukraine. The Russian president made it clear during an economic forum that he was not satisfied with how the deal is working out in practice and hinted that he wants to overhaul the deal. The possible loss of Ukraine as a grain supplier gave the market a shock. Such an event to which the market clearly reacts also attracts the interest of speculators. Now that it seems that the soup is not eaten so hot, that group is withdrawing again, resulting in a limited drop in the quotation. The fear of an economic recession also affects the grain market. Crude oil prices took a step down earlier this week and players in the grain market are looking at that with a squint. Fundamentally, the grain market will remain tight in the coming months, we just have to wait and see how demand will develop during this period.

frost damage
In Argentina, wheat has been hit by frost, reports the Buenos Aires grain exchange. The wheat already had to deal with extreme drought and now a strong cold period is coming over it. The wheat shows symptoms of frost damage in several important growing areas. That varies from yellow leaves to stems that have been frozen. The frost caused the most damage in the north of the country, where about 10% of the total Argentine wheat acreage is located. The wheat in Argentina is an important phase in the growing season a few months before the harvest. Threshing normally starts from November and continues until January.