The grain market was in a major downturn last trading session. Wheat in particular took a big step back, both in Paris and Chicago. A somewhat quieter weekend with regard to the war in Ukraine (as far as you can and may speak of it) is cited as an important cause. In addition, the weather in the US is finally cooperating a bit, although this is not yet reflected in the new Crop Progress report.
The grain market was in the red last trading session. The September wheat contract closed yesterday by €7,75 lower at €240 per tonne. On the CBoT it was not much better and the loss was close to the daily limit. The September wheat contract fell 5,3% to $6.66¾ per bushel. Corn was down 3,7% to close at $5.02¾ per bushel. Soya did not escape, although the loss here was somewhat more limited at 2,8%. Soy closed at $14.45¾ per bushel.
A weekend without major Russian attacks on Ukrainian ports and other infrastructure brought some calm to the wheat market. Corn, but especially soy, suffered a slump due to more precipitation than expected in the US. The rain is coming late for corn in the Midwest, but soy in this area can still fully benefit from it, according to experts. This does not mean that the drought problems in the northern US have been solved, but it certainly gives citizens courage again.
Spring wheat is having a hard time
The precipitation is not yet reflected in this week's Crop Progress report. For the week ending July 30, 55% of the acreage is rated good or excellent by the USDA. That's the same as last week. Soya has deteriorated slightly with 51% rating it as good or excellent. That was 52% last week. Major progress was made last week with the harvest of winter wheat. 80% of the area has been threshed. Last week the counter was still at 68%. Compared to the five-year average, the harvest is still somewhat behind. In the previous five years, an average of 83% had been harvested. The harvest of spring wheat has now also started cautiously with 2% threshed. The condition of the spring wheat has deteriorated sharply. 42% of the area is rated good or excellent compared to 49% last week and 70% last year. Barley has also been adjusted downwards, although the USDA is less certain here than with spring wheat. Of the barley area in the five most important states, half is given the status of good or excellent, compared to 52% last week.
Tender
Algeria bought between 500.000 and 600.000 tons of wheat yesterday, according to sources. Country of origin is reportedly Russia and the Algerians are said to have paid approximately $276 per tonne C&F (free). Tunisia has launched a tender for wheat. The price for Russian Black Sea wheat has fallen by $1 to $241 per tonne, according to market agency IKAR. According to SovEcon, Russia has until the 23 of Julye 4,4 million tons of wheat exported. That is well above the 2,5 million tons in the same period last year.
In South America, farmers are busy harvesting corn. In Argentina, 55% of the area has been harvested and in Brazil the counter stands at 68%. The harvest in these countries is putting additional pressure on the corn price, according to some analysts. In addition, both corn and soy in South America are priced quite competitively compared to the US.