Drought pushed up corn and soybean prices last week. Yesterday (June 22) traders chose as the time to grab their profits; while there is still a chance of rain in the US. Ukraine appears to be resigned to the end of the grain deal.
The September contract for wheat on the Matif closed higher on Thursday at €251 per tonne, up €4 per tonne. The July wheat contract on the CBoT closed higher at $7,39 per bushel, the September contract closed at $7,52 per bushel.
Good harvest weather is expected in the US in the coming weeks. The drought is bad news for corn cultivation in that region, but speeds up the wheat harvest.
It is now 99,9% certain that Russia will not extend the grain deal after July 18. The country is no longer dependent on Ukrainian ports for its own ammonia exports. A Ukrainian diplomat told Reuters yesterday. Russian wheat sold but not yet exported has doubled since the beginning of June, SovEcon reports. It is estimated that the country will start the 2023/24 export season strongly.
Rain
Corn contracts appear to have reached their peak. The July corn contract closed lower at $6,60 per bushel. And the September contract closed lower at $6,17 per bushel.
The market seems to assume that the corn crop will stabilize. Many showers are predicted in the coming period and the hope seems to be that they will at least fall somewhere in the right place. Many traders also seem to want to take their profits. Recent estimates from Gro Intelligence indicate yields are 10% lower than USDA estimates.
Ukrainian export activity has decreased significantly in recent times. There also seems to be acceptance in the corn market that the grain deal is coming to an end. The Argentine corn harvest this year is expected to reach 34 million tons. Less than the 36 million tons previously forecast, Buenos Aires Grain Exchange said yesterday.
Soybeans
The July soybean contract also closed lower at $15 per bushel, and the August contract closed lower at $14,18 per bushel. The weather also plays a role in the soy market. Soy has long been popular amid the prospect of drought in the US. With rain on the way, traders appear to be looking to sell off their purchases.