Traders hope to extend grain deal

Yesterday the Ukrainian export figures were announced. These sound good on paper, but it may only be a temporary phenomenon, Reuters reports. This year's harvest is much smaller than last year's record harvest. The recent success can also be partly explained by the fact that leftover harvest from last year may only now be leaving the country, because exports came to a complete standstill during the first five months of the year. 

Wheat
The price of the December contract for wheat on the Matif reached its lowest point in just over four weeks on Tuesday. The same milestone was reached at the CBOT. Traders seem to hope that the grain deal between Ukraine and Russia will be extended. It is also good news for them that winter wheat sowing in the US was 69% complete on Saturday. This means that progress is in line with that of last year and 1 percentage point ahead of the five-year average. However, the drought is still a concern. 

The Ukrainian Ministry of Agriculture has increased the total area of ​​winter wheat harvested from 3,8 million to 4 million hectares. Sovecon estimates that Russia's wheat exports for October are 4,4 million tons, an increase of 33% from 2021 and 13% above the five-year average. 

Tobin Gorey, director of agricultural strategy at Australia's Commonwealth Bank, said growing optimism that the grains deal would be extended makes the market particularly sensitive to if that doesn't happen, he told Reuters.

Corn
The November corn contract on the Matif closed considerably lower on Tuesday. And the December corn contract also ended lower on the CBOT. Traders are concerned about export competition. The lower water level is hampering US exports at a time of the busiest period for US crop exports. 

The German corn harvest this year will be 20,2% lower than a year ago, the German organization of farmers' cooperatives announced today (October 19). According to the organization, German corn suffered from the persistent drought and heat wave last summer. 

Brazil's grain exporters association Anec has raised its forecast for corn and soy exports for October. 

Soybeans
Traders are also concerned about competition in soybeans. Concerns about declining demand for U.S. soybeans pushed the price of the November soybean contract on the CBOT down. This despite the fact that the harvest is well underway. The lower water level and the resulting slow export also play a role here.  

Ships loaded with about 3 million tons of soybeans en route to China only arrive fifteen to twenty days later than planned due to transport delays. 

Futures
The price of the December wheat contract on the Matif fell by 2,02% yesterday to end at €326 per tonne. on the CBOT the decline is 1,13% to $8,51 per bushel ($312,68 per tonne). The December corn contract on the CBOT ended Tuesday at $6,82 per bushel ($268,39 per tonne), down 0,26%. On the Matif, the November contract for corn stood at €334,75 per tonne. A decrease of 3,3%. The November soybean contract closed Tuesday at $13,72 per bushel ($489,43 per tonne), down 0,96%.

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