Grain market players kept a low profile last trading session. Drought and the Black Sea area continue to dominate the market. This time, few encouraging figures for the French maize harvest came out. Furthermore, the news remained calm, so there was no impulse to really give the market direction.
The grain market is pausing for a while after the rising trend of the last few days. The December wheat contract on the Matif closed €1,50 lower at €352,25 per tonne. Also on the CBoT, wheat closed marginally lower at 0,8% to $8.96,25 per bushel (around $339 per tonne). Quotations for corn and soy have remained virtually unchanged on the US stock exchange over the past trading session.
The supply of grain from the Black Sea region remains a thorny issue. The wheat harvest in Russia is particularly good. That wheat must still be able to come onto the market. That is a major concern among traders and analysts. This afternoon Dutch time, Russian President Putin will officially annex four eastern provinces of Ukraine in a special signing ceremony in the Kremlin. The referendums that have been held earlier on joining Russia are not recognized internationally. In the West and in Ukraine, leaders speak of land grabs that Russia is now committing. It is unclear whether and what military consequences the annexation will have. And that makes the grain market players nervous about wheat exports. And that strange things can happen earlier this week proved with the explosions in the Nord Stream gas pipelines.
French corn crop decimated
Drought also remains an important driving force behind relatively high grain prices. Earlier this week, warnings were heard from the US and Argentina, and today comes troubling, but unsurprising news from France. Market agency FranceAgriMer announced that 51% of grain maize in the country has been harvested. In a week's time, almost a quarter of French maize has been threshed. According to FranceAgriMer, the harvest is 28 days ahead of the previous season and 1990 days ahead of the five-year average. The harvest has already started at the end of August, which is extremely early. The cause is the hot and dry summer. The yield potential of the maize has suffered greatly from the extreme weather. The French Ministry of Agriculture has previously announced that it is counting on the smallest maize harvest since XNUMX.
The drought has not only affected France but also other parts of Europe. This puts tension on the market, which mainly affects feed producers and, by extension, livestock farmers. Traditionally, Ukraine has been a major supplier of maize to the EU. Because of the war, that supply is not guaranteed. This is responded to by, among other things, extra imports from Brazil. Additional stocks are also being built, it seems. European imports are already about a third ahead of last season this season.