The grain market moved mainly sideways during the last trading session. That is quite remarkable according to several analysts. Major winter wheat regions in the US are facing extremely cold Christmases. A fiercer reaction from the market would be appropriate, according to some experts.
The March contract on the Matif closed yesterday at least €0,25 lower at €303,75 per tonne. On the CBoT, wheat prices lost 0,7% to close at $7.62¼ per bushel. Corn was 0,3% lower on the stock exchange in Chicago last trading session and soy closed 0,8% lower.
The wheat market showed a clear reaction earlier this week to the extremely cold weather forecast for parts of the Midwest and the Prairies over Christmas. The mercury can drop to minus 40 degrees. Damage to winter wheat without a protective snow cover is almost inevitable, according to experts. The effect that the frost has on the market is already fading away. The problem with overwintering is that you only really see this reflected in the wheat later in the growing season. As long as the extent of the damage is not clear, market players do not seem to want to take an advance on any damage. Exports of soy and corn from the US continue to do very well. The export figures released this week by the USDA are just above the lower end of the range of what trade expected for both commodities. Wheat exports also fell neatly within the range expected by the trade, but some critics note that expectations for wheat exports are no longer so high.
Combines
Soy took a step back due to unexpected rain in parts of Argentina. The weather premium in the price had been increased somewhat in recent days and is now being reduced somewhat due to the precipitation. This certainly does not solve the problems with drought in Argentina. This requires a longer period of wet weather. In Brazil, the first combines are already driving in the soy fields. The farmers' collective Imea from Mato Grosso (one of the largest agricultural provinces in Brazil) announced yesterday. It is just a cautious start, says Imea. Less than 1% of the sown area has been threshed. The harvest results in Brazil are expected to guide the market. The drought problem in the country is certainly not as great as in Argentina, but whether this also leads to top yields remains to be seen.
View the overview of grain prices and the technical analysis here.