Analysis Grains and raw material
Hairline cracks in large supply of wheat from Russia
According to analysts, the wheat price has been under pressure in recent days due to the ample supply of relatively cheap wheat from the Black Sea region and a large harvest in Australia. However, the mood on the is shifting. Doubts arise in particular about the export of wheat from Russia.
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The December contract for wheat on the Matif gave up €1,25 yesterday to close at €307 per tonne. The most traded contract on the Matif is the March contract, which rose by €5,75 to also €307 per tonne. On the CBoT, the March wheat contract gained 2,8% to close at $7,49½ per bushel (approximately €262 per tonne). Corn closed 0,6% higher in Chicago and soy rose 1,2% in the latest trading session.
An ample supply of wheat from the Black Sea region and a top harvest in Australia are still putting pressure on the wheat market. However, there is a turnaround in the market according to various analysts. The relatively low prices on the Matif and CBoT compared to the prices in the past six months attract buyers who now see signals that the market has reached the provisional low. That gives support in the market.
Winter coming
Doubts have arisen about the ample supply of relatively cheap wheat from the Black Sea region, which many analysts point to as the cause of the falling wheat prices in recent days. Market agency Sovecon expects that Russia will export 12,7 million wheat in the period October to December. That is 33% more compared to the same period a year earlier. Sovecon predicts that the pace of exports will decline at the end of December. Russian wheat is facing more competition from European and American wheat due to the sharp price drop in recent weeks. Ukrainian wheat is also more popular according to the market agency. Furthermore, winter storms on the Black Sea, freezing rivers in Russia and a shortage of grain wagons will make the export of wheat from Russia more difficult in the coming months.
Property law
The Russian fertilizer group Uralchem is interested in the assets in Russia of international grain trading companies Viterra and Cargill should those companies decide to leave Russia completely. The Russian business newspaper Kommersant reported this on the basis of a letter that the CEO of Uralchem, Dmitry Konyaev, sent to President Putin at the end of November. Several Western companies have withdrawn from the Russian market due to sanctions following the February 24 invasion of Ukraine. However, companies in the grain trade are not covered by the sanctions and therefore Viterra and Cargill do not have to discontinue their Russian activities. In the letter, Konyeav requested support from Putin for a proposal to take over the Russian parts of Viterra and Cargill, because the activities of these companies partly overlap with the activities of Uralchem. According to Kommersant, Putin signed 'agreement' on the letter and instructed the Prime Minister to consider Uralchem's proposal. Viterra and Cargill - which are among Russia's largest grain exporters - have informed Kommersant that they plan to divest their Russian business units. The Russian Minister of Agriculture has informed the Kommersant that the Russian Federation will 'throw out' the international grain trading companies. An anonymous source from the grain trade cited by the newspaper indicates that the forced sale of assets of foreign grain trading companies would likely create new problems for grain exports from Russia, while problems with ship chartering and payment transactions are just beginning to emerge. to improve.
View the overview of grain prices and the technical analysis here.