Russia once again manages to control the news on the grain market. In a tender, Russia has bet big for a change. In addition, the Kremlin is working with Ankara on an alternative to the Black Sea grain deal. In the US, the focus is already on the new wheat season with an area forecast.
The September wheat contract on the Matif closed €2,50 higher yesterday at €227,75 per tonne. Wheat also moved up 1,2% on the CBoT to $5.76¾ per bushel. Corn was down a bit, losing 1,7% to close at $4.61¾ per bushel. Soybean moved mostly sideways, closing 0,1% lower at $13.81¼ per bushel.
The relatively low wheat prices in recent days attracted the interest of buyers. Speculators are getting back on board for a ride upwards, according to some analysts. Yesterday there was also some price-raising news from the physical market. The results of a tender from the Egyptian state buyer Gasc were announced yesterday. And there is quite a surprise.
Gasc has committed 240.000 tons of wheat in the tender. Half of them come from France and the other half from Romania. Russia is completely left out. That's because Russia has bid relatively high at $270 per tonne FOB (delivered at port). In a sense, this is striking because Russia has behaved like a prize fighter in recent months.
The tender was not the only news from Russia. Slowly but surely, more and more is leaking out about the alternative to the Black Sea grain deal that Turkey and Russia are working on. Russia reportedly wants to supply Turkey with 1 million tons of grain at a discount, which can then be processed there and distributed to the countries that need it most. Qatar would financially support the plan.
The look forward
In the US, the wheat harvest of the current season is not yet over and an advance is already being made on the wheat of the 2024 harvest. Farm Futures has published an initial area forecast. Total wheat area would grow 6% to 52,68 million acres. The area of winter wheat will increase by 2 million hectares to 38,665 million acres if growers manage to get everything they plan into the ground. That would be the largest area of winter wheat since 2015.