The grain market was closed in the plus last Friday. Developments in the Black Sea region continue to be an important factor, especially in the wheat market. This weekend it was France that contributed. The market is also preparing for the monthly Wasde report from the US Department of Agriculture, which will be made public tonight (Monday, September 12) Dutch time.
The wheat quotation on the Matif is in the negative at the time of writing this article. The September contract is down 3,3%. The September contract is almost out of date and, with 617 open positions and 1 transaction today, it is no longer fully representative. For the other contracts for wheat of the harvest, losses are limited to approximately 0,7% to 1%. The CBoT shows similar losses for wheat and corn, while soy is on the rise.
Russia shocked the market last week by criticizing the grain deal with Ukraine. According to Russian President Putin, this agreement is mainly positive for the EU and poor countries do not benefit enough from it. Yesterday (Sunday, September 11), Clément Beaune, the French minister of transport, reported on radio station France Inter that France will sign an agreement with Romania today. The aim is to get even more wheat from Ukraine to Europe and developing countries. And especially the African countries on the Mediterranean Sea that depend on it for food.
According to Beaune, the agreement concerns routes over land, sea and river. Reuters news agency has seen a draft agreement between France and Romania. This would include ambitions to improve the efficiency of the port of Galaţi, provide the border crossings in northern Romania with better equipment, make maximum use of containers for grain exports that are already present in the port of Constanța and increase the capacity in this port and in the Sulina channel. In the draft agreement, France provides financial resources and technical expertise for the short and medium term.
Drought costs kilos
The trade is preparing for the presentation of the Wasde report that the USDA will publish in the early evening Dutch time. Analysts assume that a significant upward adjustment will be made for the Russian wheat harvest and that the European corn harvest will be adjusted considerably lower. The greatest uncertainty concerns the corn and soy harvest in the US. Warm and dry weather continues to characterize the growing season. This is expected to result in lower yields. The Po Farmer Midwest Crop Tour showed yields two weeks ago that came in below the USDA's August forecast. It therefore seems logical that the ministry reduces revenues in the September edition of the Wasde. A JP Morgan analyst is talking about a 1,6% reduction in corn inventories compared to August, largely due to a smaller US harvest. Whether the USDA actually dares to significantly reduce yields remains to be seen. The ministry has already surprised the market several times this year.