The grain market showed a correction in the last trading session after the sharp rises earlier this week. Uncertainty about the availability of grain from the Black Sea region remains a difficult factor for analysts. One thinks it will run smoothly while other experts are not so sure. India, meanwhile, is heading for a record wheat crop.
The wheat quotation on the Matif took a step back yesterday. The March contract drops by €3 to €296,50 per tonne. On the CBoT, wheat fell 2,1% to $7.69½ per bushel. Corn lost 0,9% to close at $6.76¼ per bushel and soy was down 0,8% at $15.25¾ per bushel.
The strong dollar, the faltering economy in the US and the fear that the US central bank will raise interest rates further put pressure on the prices of grains quoted in dollars, according to several analysts. What also plays a role is that after the rally earlier this week, speculators are taking their profits and getting out now. Rain in eastern Colorado and northern Kansas is providing some relief to winter wheat, which is suffering from drought in the area.
Ask for barley
In Europe, FranceAgriMer published export forecasts for France yesterday (Wednesday, February 15). The market agency predicts that less soft wheat will be exported. French wheat exports face stiff competition from the Black Sea region. On the other hand, FranceAgriMer expects that a considerable amount of extra barley will be exported from France. The market agency makes this forecast based on the recent buying wave in China.
Grain exports from the Black Sea region remain a major uncertain factor on the market. Ukraine yesterday asked the UN to intervene and force Russia to stop obstructing the current export deal by delaying the inspection of grain ships. Russia, meanwhile, hints at a possible non-extension of the current deal, which expires in March. It is notable that Russia has made an 'emergency donation' of 25.000 tons of wheat to Cuba. This is seen by analysts as a gesture to further strengthen the old ties between the two countries.
Favorable growing season
India is heading for a record wheat harvest in 2023. According to the Indian government, wheat production will increase by 4,1% compared to last year to 112,2 million tons, it was announced this week. The rapeseed harvest is growing by 7,1% compared to last season and amounts to 12,8 million tons. The larger harvests are partly due to an expansion in acreage, but the yields per hectare are also higher due to favorable weather conditions during the growing season. Due to the relatively high grain prices, Indian farmers have also invested more in cultivation, including other varieties with a higher potential yield.