The grain market gives mixed signals. Wheat corrected after the increase earlier this week. Soy also closed lower, partly due to the good harvest expectations in Brazil. It was also announced that the Egyptian state buyer has canceled the maize tender that closed this week.
The March wheat contract on the Matif gave up €2,50 yesterday to close at €285,25 per tonne. On the CBoT, wheat fell 0,2% to $7.59¾ per bushel. Corn closed higher on the American stock market, rising 0,2% to $6.81 per bushel. Soya was the biggest loser in the last trading session, dropping 1,2%.
According to some analysts, the small correction in the wheat market is mainly due to speculators who are now taking their profits after the rise on the American stock market earlier this week. The condition of winter wheat on the US prairies remains a concern. The USDA released figures earlier week that show that the condition of the crop has deteriorated considerably in several states, mainly due to drought. This week's cold could still hit winter wheat.
The grain market is looking for signals that demand from China is picking up. It was expected that demand for grain would pick up after the Chinese New Year. The players in the market are now looking for indicators that China is indeed in the market. Partly for this reason, the export figures from the USDA, among others, which will be released later this week, are being watched with extra interest.
Record harvest
The price of soy is now under pressure. This largely has to do with the soy harvest in Brazil, where the combines are currently in full operation. A record soy harvest is expected for the country. As the harvest progresses it will become clear whether these high expectations prove to be justified. StoneX increased its expected soy harvest by 410.000 tons to 154,2 million tons. Neighboring country Argentina has a very moderate harvest forecast due to the drought, which according to weather forecasters will last at least another week. The Association of Grain Exporters and Processors announced today that revenues from the export of grain, oilseeds and derivatives fell by 61% in January compared to the same month last year.
Egypt's state purchasing agency GASC yesterday canceled the corn tender for delivery in late February and early March. The prices in the tender ranged from $300 to $316 per tonne, excluding transport. A tender for wheat has just been closed by GASC. Thirteen suppliers have made an offer, but the prices have not yet been announced.