The European wheat market is in relatively calm waters at the moment. The supply of the cheaper wheat from the Black Sea region puts a ceiling in the wheat market according to analysts. The major price movements in the grain market are now coming from America.
The wheat quotation on the Matif moved mainly sideways yesterday. The December wheat contract closed €326,50 higher at €0,50 per tonne. On the CBoT, wheat contracts were on the rise last trading session. The December contract closed 1,8% higher at $7,71½ per bushel (about €272 per tonne) in Chicago. Soy closed 0,7% higher on the CBoT and corn lost 0,6% on the American stock market.
According to analysts, both wheat and soy showed an increase due to optimism about possible relaxations in China's corona policy. Two cities announced yesterday (Wednesday, November 30) that they would slightly relax the corona measures. A day earlier, demonstrators clashed with the police over the strict policy. China has the strictest anti-corona policy in the world, but hairline cracks are now starting to appear. The lockdowns and other restrictive measures are at the expense of demand for raw materials, including grain in China, which is an important player on the world market. Now that restrictions are being eased, analysts expect that Chinese demand on the global market will hold up better.
Stimulation works
In Argentina, soy exports are taking off again. Just like earlier this season, the government has opened a scheme that allows farmers and traders to sell soy in dollars at favorable exchange rates. Argentina does this to promote the inflow of dollars. That also seems to be successful now. The Buenos Aires grain exchange reported that soy exports doubled on Tuesday compared to the day before.
Ukraine exports about 450.000 tons of grain via Poland every month. That is approximately 50% more than six months ago, the Polish Minister of Infrastructure announced yesterday. Since the Russian invasion and subsequent blockade of Ukrainian ports on the Black Sea, alternative routes for grain exports have been sought. As a neighboring country, Poland plays an important role in this. The supply of wheat from the Black Sea region in particular is currently placing a ceiling on the wheat market.
Biofuel
The US Environmental Protection Agency plans to further increase the blending percentage for bio ethanol and other biofuels in regular fuels over the next three years. This is reported by the Reuters news agency based on two well-established sources. As part of the agency's renewable energy policy, electric vehicles are now likely to be included in biofuel plans. It will then become possible to generate electricity with bioenergy for charging electric vehicles. Car manufacturers such as Tesla can thus earn tradable 'D3 credits'. The energy for electric vehicles should be generated with biogas and not from, for example, corn, as is currently the case with bioethanol that is mixed into gasoline.