The grain market is sending mixed signals. The fact that an extension of the grain deal still seems a long way off does not make the market nervous anymore. There was, however, a contrary reaction in Europe and America. In maize and soya, it is dominant again. And that is not unjustified if you look at the latest Crop Progress report from the USDA.
The September wheat contract on the Matif closed yesterday €2,25 lower at €233,50 per tonne. However, most of the trading is on the December contract, which gave up €0,50 to close at €233,50 per tonne. On the CBoT, wheat was cautiously on the rise. The September contract rose 0,9% to $5.72½ per bushel and December added 0,6% to $5.99¼ per bushel. Corn rose 1,3% on the Chicago exchange to close at $4.71 per bushel. Soy showed a small downward correction of 0,5% to $13.49 per bushel last trading session.
In the wheat trade, the meeting between Russian President Putin and Turkish President Erdogan is still lively. A resumption of the Black Sea grain deal has not come any closer, although Turkish media report that Erdogan will bring the grain deal back up at the UN meeting later this month. Positive news from the Sochi consultations is that an attempt is being made to prevent famine. Russia wants to make 1 million tons of wheat available via Turkey to countries that desperately need it, in addition to the upcoming agreement between the Kremlin and six African countries that will each receive 50.000 tons of grain for free.
Doubts about Egyptian wheat order
That's not the only news from Russia. Last Friday it was announced that the Egyptian state buyer Gasc had purchased 480.000 tons of wheat of Russian origin from private traders for $270 per ton free of charge. However, this is doubted in the trade. The suspicion is that it concerns an agreement between the countries rather than between private trading companies and that the price per tonne is several tens of dollars lower. That is certainly not unthinkable. Russia has had a good wheat harvest and is looking for customers for that grain. Sovecon increased its export forecast for Russia by 500.000 tons to 48,6 million tons.
Corn and soy are suffering from drought
The USDA updated the Crop Progress report yesterday, a day later than normal due to Labor Day on Monday. Corn has deteriorated, partly due to the warm and dry weather. 53% of the area receives the status of good or excellent compared to 56% last week. Soy showed a greater deterioration. 53% of the area received a good or excellent rating this week. That was still 58% last week. According to various experts, last week's warm and dry weather is the cause of the setbacks in corn and soy.
Good progress is being made in the US with the harvest of spring wheat, barley and oats. Oats are 90% in, wheat 74% and barley 80%. Compared to the five-year average, the harvest is still slightly behind, namely 92%, 77% and 81% respectively.