Wheat availability remains a concern in the grain market. FranceAgriMer has revised its export forecast downwards. Offer of wheat from Ukraine gives some relief on the market, but Putin is not happy about how the grain deal is working out for Russia. And in the US, a railroad strike causes headaches.
On the Matif, the price of the December contract rose to €337,25 per tonne. That is the highest rating in a month. On the CBoT, the quotation of the December contract even rose to the highest point since the end of June. Corn and soy were somewhat down again last trading session. Speculators are still taking their profits after the rally that peaked on Monday, according to analysts.
The French market agency FranceAgriMer lowered its export forecast for soft wheat to countries outside the EU on Wednesday. The total export according to FanceAgriMer amounts to 10 million tons. That is a reduction of 300.000 compared to the previous estimate, but still 14% above the July forecast. Due to the supply of cheaper wheat from the Black Sea region, demand for French wheat is slightly lower, according to the market agency. Due to the drought, the total supply of grain available for export is also slightly lower. The French closing stock of wheat has remained virtually unchanged compared to the previous forecast at 2,36 million tons. The closing stock of barley has been increased from 1,56 to 1,66 million tons. FranceAgriMer does not yet make a forecast for maize as only 5% of the area has yet been harvested.
dissatisfaction
The supply of wheat from the Black Sea region remains a point of concern. The export of grains from Ukraine is gaining momentum, but is still far from reaching the level before the Russian invasion. UN Secretary Antonio Guterres had contact with Russian President Putin on Wednesday, including about the grain deal with Ukraine. Guterres said afterwards that it is absolutely necessary to remove the obstacles surrounding fertilizer exports from Russia. However, several analysts are not so sure that the grain deal will last, given the course of the war and the faltering Russian economy.
In America, an impending railroad strike is causing problems with grain exports. The unions are demanding, among other things, a significant wage increase and better working conditions. Three of the twelve unions, which represent approximately half of the rail workforce, have rejected the employers' proposal. Nearly 30% of freight transport in the US takes place by rail. A strike therefore has major consequences not only for the grain market but also for the American economy as a whole. That is why the Biden administration is now also actively involved in the railways. For example, the government is working on an emergency plan with alternative transport to somewhat limit the consequences of a railway strike. Players in the food and energy sectors have already announced that if the trains stop running, this could result in sharp price increases.