The rising tension in Ukraine due to the delivery of tanks has not gone unnoticed on the grain market either. Wheat market players in particular fear that a further escalation of the war could hamper wheat exports.
The March wheat contract on the Matif rose yesterday by €2,75 to €284,50 per tonne. Wheat was also on the rise at the CBoT. On the Chicago exchange, the March wheat contract rose 1% to $7.41½ per bushel. Soy also rose 1% to $15.02½ per bushel. Corn slipped 0,3% to close at $6.74¾ per bushel.
Germany has agreed to supply Leopard 2 tanks to Ukraine. That makes players in the wheat market nervous, according to several analysts. The prevailing thought is that a further escalation of the war in Ukraine is in the offing due to the availability of tanks. The war could disrupt wheat exports from the Black Sea region, which has been somewhat revived, partly due to the grain deal. Russia and Ukraine are both major powers on the global wheat market and any new export problems will weigh heavily on the availability of wheat in the already tight market, analysts believe.
In 2022, Russia harvested a large grain harvest. The starting position for the coming season is also not bad. According to the Russian Ministry of Agriculture, 94% of the winter grain area is in good condition, the ministry announced yesterday. In the important agricultural regions of Rostov and Volgograd, approximately 98% of the area is in good condition. In Krasnodar, even 100% of the area has survived the winter well so far, according to the Russian ministry. The area of winter grains in Russia is smaller than last season with 17,7 million hectares this season compared to 18,4 million hectares last season.
India is trying to suppress wheat prices
In India, the government is marketing 3 million tons of wheat from the intervention stock, writes Reuters news agency based on sources within the Indian government. Wheat prices on the domestic market rose sharply this month and even reached record highs. By making wheat available to large bulk buyers such as mills, the government hopes to bring the price down again. India expects a large wheat harvest for the new season, partly due to a favorable growing season and an expansion of the acreage. But it will still take a few months before the harvest starts in the important growing regions. Until then, the supply of wheat is tight, according to analysts.
The soy price was on the rise last trading session. Unlike wheat, this is mainly due to a new round of buying after the market fell earlier this week, according to experts. However, several analysts expect that the rally in the soy market will only continue to a limited extent. Improved weather conditions in South America - especially rain in Argentina - are putting a ceiling on the market. The slightly lagging export of soy from Argentina may also put a brake on prices. Of the 2021/22 harvest, 80,6% has been exported according to data from the Argentine Ministry of Agriculture. last season it was 82,6%.