The European wheat market feels fairly stable. In America there is more life in the market. Sometimes the USDA's Wasde report wants to stir things up in the grain market. That is not the case this month. Developments in the Black Sea region are making the wheat market in particular more attractive. Furthermore, it is mainly the weather that continues to leave its mark on grain prices.
At the time of writing, the December contract on the Matif is up €0,25 compared to Friday at €303 pre ton. This contract is close to expiration and most of the trading is on the March contract which is €2,25 higher compared to the weekend close of €305 per tonne. On the CBoT, wheat is on the rise with an increase of just under 2%. Corn is almost 1% higher, while soy is currently declining slightly and is more than 1% lower than on Friday.
The Wasde report aims to set the grain market in motion. However, the December edition of the report, which was released on Friday evening Dutch time, left the market cold. Some adjustments have been made to the harvest forecasts and consumption. The world ending stock of wheat has been adjusted downwards by 500.000 tons to 67 million tons and the soy stock has been increased by 500.000 to 102 million tons. These are not shocking changes and are in line with what the market players more or less expected.
Cheap offer
The supply of relatively cheap wheat from the Black Sea region continues to play a dominant role. The price has even fallen slightly further after the falling prices on the CBoT and the Matif. Market agency IKAR lowered the Black Sea wheat quote by $1 to $314 per tonne and the Sovecon quote fell by $2 to $312 to $316 per tonne. Sovecon reported that wheat exports from Russia last week amounted to 550.000 tons. A week earlier that was still 1 million tons. Exports are delayed due to storms in the Black Sea and low water levels in the Sea of Azov. Furthermore, Sovecon reported that the Russian Ministry of Agriculture intends to purchase up to 3 million wheat. Grain exports from Ukraine were hampered by Russian drone and missile attacks on the infrastructure of the port of Odessa. The electricity network, among other things, was targeted in the attacks. Exports have therefore come to a standstill, but have resumed today (Monday, December 12), the Ukrainian Ministry of Infrastructure reports.
The drought in several major wheat growing areas is putting a damper on the market to some extent. Argentina is heading for the smallest wheat harvest since the 2015/16 season. In the southern prairie states in the US, wheat sown this fall is having difficulty getting started. In the Mediterranean region, the start of winter wheat is not optimal due to a lack of moisture or a late sowing date, as shown by the Gleoglam crop monitor. In Russia, the development of winter wheat is lagging behind due to a lack of precipitation. According to Geoglam, in addition to a shortage of moisture, Ukraine is also struggling with the consequences of the war.
View the overview of grain prices and the technical analysis here.