In Europe, the wheat price is cautiously on the rise, while in the US the price actually took a step back. The market thus processed the latest export figures from both the US and Ukraine. In the longer term, geopolitical developments may surprise the market, some analysts warn.
The March wheat contract on the Matif closed yesterday €4 higher at €288,50 per tonne. On the CBoT, wheat lost 0,9% to $7.50¼ per bushel. The soy price also fell 0,7% to $15.21¼ per bushel. Corn rose at the stock exchange and Chicago, adding 0,2% to close at $6.79 per bushel.
The falling wheat price on the CBoT is surprising to some analysts. The weekly export figures show that 536.000 tonnes of wheat were exported last week. This is above expectations from the trade, which expected an export of between 300.000 and 525.000 tons of wheat. Compared to last season, exports this season are still 2,1% behind.
Grain exports from Ukraine are considerably behind last season. According to the data of the Ukrainian Ministry of Agriculture, 2022 million grains have been exported so far in the 23/27,7 season. Last season around this time the counter stood at 39,2 million tons. Of the grain exported, 9,9 million tons are wheat, 15,9 million tons are corn and 1,8 million tons are barley. According to the ministry, exports in the first week of February amounted to 714.000 tons, which is slightly behind last year when 740.000 tons of grain were exported in the same period. Total grain exports for the current season are estimated at 51 million tons. Last season, exports amounted to 86 million tons. It should be noted that Ukraine then reaped a record harvest.
Geopolitical tension is rising
Political unrest could cause the grain market to make an unexpected jump in the near future, several analysts warn. Russia hints at a new offensive in Ukraine. How and what is not clear, but it is conceivable that critical infrastructure will be damaged and it is not clear what consequences this would have for the current grain deal. Russia has a great interest in keeping the Black Sea open for the export of its own wheat. Relations between China and the US have cooled due to the Chinese balloon that floated above American territory. According to the US, it may be espionage, while China claims it is a weather balloon that has gone off course. The US already has an active policy to prevent sensitive technology from ending up in China. Consider, for example, the pressure that the US exerts on the Dutch ASML about which chip machines the company may or may not supply to China. A Chinese counteraction in the form of an import restriction on soy from the US is certainly not unthinkable. In the background, Brazil expects a record soy harvest and China therefore has another supplier of the oilseed.