It was a trading day without any major surprises and this is also reflected in the market. Corn and soy have suffered some decline in the Crop Progress report. This was to be expected given the drought in the US. According to Ukrainian President Zelensky, the sanctions against Russia are having an effect on the course of the war. Ukraine is therefore critical of relaxations to get the Black Sea grain deal up and running again.
The September wheat contract on the Matif closed yesterday at €205,75 per tonne. The December contract closed €2 lower at €234,25 per tonne. On the CBoT, the December wheat contract gave up 1,9% to close at $5.84½ per tonne. Corn and soy moved mainly sideways last trading session. The December corn contract rose 2 cents to $4.85¾ per bushel and the November soybean contract added 0,4% to $13.69 per bushel.
The USDA made no major adjustments to the Crop Progress report this week. Of the corn acreage in the US, 52% is rated good or excellent. That was 53% of the area last week. The maize harvest has already started cautiously. 5% has been threshed compared to 4% this week in the five-year average. Soya also suffered a slight decline last week. 52% of the area receives the status of good or excellent compared to 54% last week. The oat harvest is almost over in the US with 95% harvested. American farmers are also working on the finishing touches with spring wheat and barley. 87% of spring wheat has been harvested and 89% of barley. The first winter wheat is already back in the ground. 7% of the planned area has been sown. The states of Washington, Colorado and South Dakota lead the way with 29%, 19% and 17% seeded respectively.
Sanctions have an effect
It is fairly quiet in the Black Sea area. According to Ukrainian President Zelensky, the war is slowing down due to Western sanctions against Russia. The Kremlin is experiencing major inconveniences with arms deliveries. Because the consequences of the sanctions are felt on the battlefield, Ukraine is strongly opposed to easing sanctions to revive the Black Sea grains deal. Ukraine is instead focusing on exporting via the EU, it seems. This puts Ukraine on a collision course with a group of five EU member states that have enforced measures to prevent market disruptions due to the relatively cheap grain from Ukraine.
An interesting detail is that British Prime Minister Sunak announced yesterday that Russia had attempted to attack a civilian cargo ship in the Black Sea. It concerns the ship that sails under the Liberian flag and that left the port of Odessa via the temporary safe corridor on August 24 after a year and a half. However, the fired torpedoes were intercepted in time.
Russia is now putting wheat on sale, some sources report. On the one hand, the Kremlin has increased the export tax, but in practice several exporters appear to work around this. This could have a price-pressing effect on the wheat market in the coming weeks.
The Buenos Aires grain exchange released a new harvest forecast for the 2023/24 winter wheat season. The stock exchange expects a yield of 16,5 million tons. That is significantly higher than last season's wheat harvest, which stood at 12,2 million tons. The USDA was even more optimistic in the latest Wasde report with 17,5 million tons.