Prices on the grain market came under a little pressure last trading session. There is some competition from wheat from Russia and that is putting the market upside at the moment. In the EU, wheat exports continue steadily, while in the US it does not want to progress as much with exports.
The December contract for wheat on the Matif closed yesterday at €325,75 per tonne. That is €0,75 lower compared to the closing price the day before. On the CBoT, the December contract closed at $7,58¾ per bushel, down 1,7%. The December contracts on the CBoT and the Matif are about to expire. The number of open positions is being rapidly reduced and prices are therefore becoming more volatile. This is especially noticeable in Chicago, where there were only 1.100 open positions in the last trading session. Corn and soy also took a small step back on the stock exchange in Chicago.
US wheat exports fell short of trade expectations this week. Analysts expected wheat exports somewhere between 300.000 and 725.000 tons, but the USDA export statistic was stuck at 162.500 tons. Corn exports, at 632.700 tons, were well within expectations. On the other hand, wheat exports from the EU are doing better than expected. Nord Cereales, which operates the third largest grain export terminal (located in Dunkirk) in France, reports that it has already exported 1,2 million tons of grain this season. That is the largest volume for the first five months of the season in more than ten years.
Supply and demand
Although European wheat exports are doing well, the supply of relatively cheap wheat from Russia is putting some pressure on prices on the Paris stock exchange (and also Chicago), according to several analysts. Due to the war in Ukraine and the related uncertainties and sanctions, buyers are somewhat cautious about importing grain from Russia and Ukraine. However, if the price difference increases too much, buyers will not completely ignore grain from the area. Russia's position is further strengthened by a large grain harvest last season.
There is no question of a large wheat harvest in Argentina. The Buenos Aires stock exchange expects revenues that are below forecasts, it was announced yesterday. The fair's current harvest forecast for the 2022/23 season is 12,4 million tonnes. In May, at the start of the season, the forecast was still 20,5 million tons. Late frosts in the growing season and drought have severely damaged the wheat. Approximately 23% of the wheat area in Argentina has been harvested. Threshing is therefore 22 percentage points behind last year. The sowing of soy is also lagging behind considerably. 29,1% is in the ground compared to 46,3% a year earlier.
View the overview of grain prices and the technical analysis here.