The problems with the export of grain from Ukraine took hold in the past trading session, especially on the wheat market. The price therefore took a step up. Soy, on the other hand, took a step back, fueled by developments in South America.
The December wheat contract on the Matif expired yesterday, Monday December 12, at €304,25 per tonne. That is €1,50 higher than the closing price on Friday. The March contract closed €3,50 higher at €306,25 per tonne. On the CBoT, the March wheat contract rose 2,8% to $7.54¾ per bushel. Corn closed 1,5% higher at $6.50 a bushel. Soybean prices fell 1,6% to $14.50½ per bushel.
The extension of the grain deal with Russia and Ukraine brought relief to the wheat market by more or less securing the export of grain in this region that is important for world trade. The Russian bombing of infrastructure in Ukraine is making wheat market players nervous. The port of Odessa was therefore without power on Sunday, resulting in transhipment operations coming to a standstill. The power supply was restored on Monday and the shovels can now be loaded again, but it did make players on the grain market think. The grain deal and safe corridor are de facto worthless if the ships cannot be loaded and Russia appears to have no intention of stopping attacks on Ukraine's power supply.
Space upwards
What is also a factor, according to analysts, is that wheat quotations are at a relatively low level compared to the last eight months. This attracts the interest of bargain hunters on the wheat market. In part, these are buyers and processors who now store wheat at a level that is acceptable to them. Another part are speculators who calculate that there is a chance that prices will fall further, but who consider a price increase more likely.
Soy was under pressure last trading session due to rain in Argentina. Part of the drought-affected soy belt received significant rain last weekend. In Brazil, 95% of the planned soy area is in the ground, market agency AgRural reported yesterday. Growers are concerned about the poor distribution of precipitation in Brazil. It is especially dry in most southern provinces of Brazil. The soy has just been sown and the drought has only limited consequences for the potential yield. This is different for corn. That crop is already damaged by the drought, according to AgRural. Showers are forecast in large parts of Brazil in the coming days. The weather reports do not fully reassure farmers because it is not clear how the precipitation is distributed.
View the overview of grain prices and the technical analysis here.