Possibly more exports from Russia, wheat cheaper

Russia, which mainly exports to Africa and the Middle East, normally sets an export limit to ensure that the country has enough grains for its own consumption. However, such a limit is not necessary now, Deputy Prime Minister Viktoria Abramchenko is said to have said on Tuesday, October 11, the Interfax news agency reported. According to Abramchenko, because of the large harvest, there are no reasons to set an export limit. 

The export limits traditionally apply from February 15 to June 30. For the period from July 2022 to June 2023, Russia hopes to export 50 to 60 million tons of grains. The country assumes that the total harvest yield is 150 million tons and that 80 million tons are needed for domestic use. A country that may start importing more wheat is Australia. That country has to deal with large-scale rainfall that has a negative impact on the quality of the crop. 

Another factor for the falling wheat price is the renewed Covid-19 measures in China, which makes traders fear contracting global demand. 

controls
This week it became clear that the line of ships to and from the Black Sea at the checkpoint in Istanbul is getting longer. Now, UN official Amir Abdulla, who oversees Ukrainian exports, has asked Russia and other parties to stop full controls in order to further catch up. 

Amir Abdulla, who is also coordinating the grain deal, has proposed faster and more targeted control of ships. "Something has to change and I hope that during the negotiations we come to a better way to conduct inspections," he told Reuters. “There should be a check, but it doesn't have to be a full check. I've suggested maybe checking specific places or specific ships."

United Nations negotiators arrive in Russia on Sunday to discuss an extension of the grain deal that ends on Nov. 19.

Soy under pressure
Although the price of the November contract soybeans rose slightly on Tuesday, it is now under pressure. In fact, 44% of soybeans have now been harvested, which is twice as much as a week ago, and just under a year ago when 47% of soybeans had been harvested around this time. The five-year average is 38%. 

Now that the harvest is progressing, more and more soybeans are coming onto the market and more are also inspected for export. Last week, a total of 969 thousand tons of soybeans were inspected, a week earlier that was 585 thousand tons. However, the inspected quantities are still 23% lower than a year ago. Despite the good news that more soy is being inspected, the quantities are still historically low. It is the lowest volume inspected for the past week since 2013. China also bought the least US soybean since 2003, not counting the trade war in 2018. According to Reuters analyst Karen Braun, next week's volume should be 80% higher to avert immediate concerns. 

Analysts expect the USDA to increase yield per hectare from 124,78 bushels to 125 bushels per hectare on Wednesday in the WASDE report. The US is also expected to lower forecast soybean exports, given low exports in September and competition from Argentina. 

Corn yields
Most of the maize harvests also focus on the WASDE report. Reuters reports that analysts expect a slightly lower maize yield per hectare. From 426,257 bushels per hectare to 424.527 bushels per hectare. On the Matif, the price of the November maize contract fell by 6 euros per tonne and the December maize contract also closed considerably lower on the CBOT. 

News from the French government shows that the maize harvest is 26,6% lower than a year ago and 18,4% below the five-year average. This news does not seem to have pushed the price up on the Matif. This may be due to good crop progress in the US, where the corn crop was above the five-year average for the first time in a month. Last week, 31% of US corn was harvested, higher than the five-year average of 30%. Analysts had hoped for even better. 

American corn exports are still behind schedule, partly due to the low water level on the Mississippi. Traders expect export figures to be below average in the coming weeks and not really get going until later in the fourth quarter. 

Futures
The December wheat contract on the CBOT closed 3,5% lower Tuesday at $9,013 per bushel ($331,15 per tonne). On the Matif, the December wheat contract ended 2,26% lower on Tuesday at €356 per tonne. The November corn contract closed 1,73% lower at €340,75 per tonne. On the CBOT, the December corn contract ended 0,57% lower at $6,93 per tonne ($272,82 per tonne). Finally, the price of the November soybean contract ended 0,05% higher at $13,75 per bushel ($505,13 per tonne).