News of the extension of the Black Sea grain deal mainly affected US traders during the past trading session. The European players seem much less impressed by the grain deal.
The December contract for wheat on the Matif closed yesterday at €324,50 per tonne. That is an increase of €4,75 compared to the day before. On the CBoT, wheat suffered a spring, closing 1,3% lower at $8,06¾ per bushel (€286 per tonne). Soya also lost slightly and closed 0,9% lower. Corn was on the rise on the American stock market and rose 0,3% to $6,67½ per bushel (approximately €253 per tonne).
Look here for the current rates
Reaching an agreement on the extension of the grain deal between Russia and Ukraine had a clear downward effect on wheat prices, especially on the American market. Wheat from the Black Sea region is a much bigger competitor for Europe, but apart from the start of the trading day, there was hardly any price depressing effect in Paris. According to some analysts, European trade had already made a significant advance on extending the deal. The soothing words from the West after the rocket impact in Poland earlier this week have strengthened traders' thoughts in recent days.
Ukraine's Ministry of Agriculture announced today that farmers in the country have harvested 39,1 million tons of grain so far this season. Of the total yield, 19,4 million tons are wheat and 5,6 million barley. By comparison, last year's wheat harvest amounted to 32,2 million tons and 9,4 million barley was threshed. Ukrainian farmers sowed 2022 million hectares of wheat for the 6 harvest, but due to the Russian invasion they were only able to harvest 4,7 million tons.
Too dry or way too wet
While the export of wheat from the Black Sea region can continue for the time being, reports are coming from other major exporting countries about setbacks in the availability of grain. Argentinian farmers may sow significantly less soy if significant rainfall does not occur soon. According to the Buenos Aires grain exchange, 12% of the planned area is in the ground. Last year around this time the counter was 29%. The total soy area this season is estimated by the stock exchange at 16,7 million tons. In Australia, farmers are struggling with the consequences of extreme precipitation. This is causing the worst flooding in New South Wales in decades and the danger has not yet passed. The focus is currently on rescue work, but it is clear that infrastructure and crops in the affected regions have also suffered significant damage.
View the overview of grain prices and the technical analysis here.