The wheat price took a step back in the last trading session. Speculators pulled out of the market after the rally in recent days. The supply of relatively cheap wheat from Russia also weighed on the market. Furthermore, the eyes of traders and analysts are on Argentina. That country is experiencing an extremely dry year.
The March wheat contract gave up €6,50 on the Matif to close at €308 per tonne. On the CBoT, wheat prices fell 1,5% to $7.74 per bushel. Corn got sucked into this move, losing 0,5% in the last trading session. Soy showed a small increase on the stock exchange and Chicago, adding 0,2% to $15.08¾ per bushel.
In the wheat market, speculators took their profits after the rally caused by the extremely cold weather in large parts of the US. The weather premium in the price will therefore be reduced somewhat, several analysts say. Whether that is correct remains to be seen. The extent of the frost damage caused by the low temperatures during the Christmas holidays will only become clearly visible in a few weeks. In addition, the supply of relatively cheap wheat from the Black Sea region places a ceiling on the market. Russia hit the European and American wheat markets this week with the sale of 200.000 tons of wheat to the Egyptian state purchasing agency GASC.
Drought provides support for soy quotations
The wheat harvest in Argentina may be even more disappointing than previously expected. The Buenos Aires grain exchange warned about this yesterday (Thursday, December 29). Due to a frost attack relatively late in the season and an extremely dry growing season, the yield forecast had already been reduced from 20,5 million tons at the start of the season to 12,4 million tons. The Buenos Aires stock exchange expects that this forecast is still too high and will be further adjusted downwards in the coming weeks.
The drought in Argentina also has a major influence on the mood on the soy market. Significant precipitation was forecast in Argentina last weekend. In the end there was much less rain than expected. Rain is again in the forecast for Argentina for the coming week, but the market does not seem confident that it will be enough to solve the drought problems. The country in South America is experiencing the driest year in more than a century.