Improved weather forecasts for South America are putting pressure on corn and soybean prices. The harvest expectations for Argentina remain a concern, analysts warn. In the wheat market, the Black Sea region remains an important uncertain factor. Yesterday, Putin hinted at possible export restrictions for grain, but that now seems to be being debunked a bit.
The March wheat contract on the Matif closed yesterday at €288,75 per tonne. That is €1 higher compared to the day before. On the CBoT the quotes closed in the red. Wheat lost 1,2% to close at $7.42½ per bushel. Corn closed 0,6% lower at $6.81¼ per bushel and soy closed at $15.24½ per bushel, or 1% lower.
Rain in the weather reports for Argentina and dry, favorable harvest weather in Central Brazil put particular pressure on the price of soy and corn. Crops in drought-stricken areas in Argentina could get a big boost from the rain. Some analysts warn not to become too optimistic about the revenue potential. Farmers have waited a relatively long time to sow and the crop has started lagging behind. The chance of an above-average harvest in Argentina has therefore already been lost. A top soy harvest is expected for Brazil in the current season. Cargill and Viterra have two ships en route to load soy in Brazil. That is nothing strange, but the destination would be Argentina, Reuters writes based on the ship data. It happens more often that during the period between the soy harvests in Argentina, oilseed is sent from Brazil to Argentina to keep the processors running during the slack period. But usually that import starts later. The disappointing harvest forecasts in Argentina and the high margins in soy processing are stimulating the demand for soy in Argentina, according to experts.
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In the wheat market, analysts are mainly focused on the Black Sea region. The UN yesterday called on parties involved in the grain deal to address inefficiencies in logistics. More than a hundred ships are waiting off Turkey for inspection before they can continue sailing. The statement did not point to a specific party, but last week UN Ambassador Linda Thomas-Greenfield accused Russia of deliberately delaying inspections of grain ships in the Black Sea.
Putin's statements about securing our own grain supply also have an impact on the wheat market. The Russian president hinted at possible export restrictions but made no specific announcements or concrete proposals. The Russian Ministry of Agriculture announced today that it expects Russian grain exports for the 2022/23 season to reach 55 to 60 million tons. The ministry also has no plans to reduce export quotas. At least that is what the Russian news agency Interfax writes.