Ukraine dealt the Russian Black Sea Fleet a severe blow yesterday with an attack on Sevastopol. Russia, meanwhile, continues its attacks on Ukrainian facilities on the Danube. As a result, the war gained some more grip on the grain market yesterday. Furthermore, the trade is still chewing on the Wasde report.
The December wheat contract closed yesterday on the Matif €6 higher at €238 per tonne. Wheat was also on the rise on the CBoT and recorded a plus of 1,7% to $5.97¼ per bushel. The December corn contract rose 1,2% to $4.82¼ a bushel. Soy moved mainly sideways last trading session. Oilseeds rose 0,2% to $13.49¾ per bushel.
The Wasde report from earlier this week still had some influence on the wheat market yesterday. The story of low wheat ending stocks is not new, but it has enticed speculators to get back into the wheat market, according to some analysts. Opinions differ about how much we should deal with the tight wheat supply. We have been hearing for decades that production is having difficulty keeping up with demand. Until now, growers have always managed to produce more wheat, so why not this time, some analysts reason. Others are looking at the smallest ending inventory in eight years and, perhaps more importantly, the inventory-to-consumption ratio which has fallen to a nine-year low.
Black Sea Fleet under fire
The unrest on the wheat market was further fueled by new attacks from both Russia and Ukraine. Ukraine carried out a major attack on Sevastopol in Crimea on Wednesday. That port is the headquarters of the Russian Black Sea Fleet. A Russian submarine and a large landing ship were reportedly severely damaged in the attack. Russia again targeted Ukrainian port facilities in the Danube estuary. According to the Ukrainian vice president, Russia has damaged 18 installations since July 3. As a result, XNUMX million tons of grain were not exported to Asia, Africa and Europe.
Iranian state buyer GTC has purchased 240.000 tons of baking wheat. The country of origin has not been disclosed, but it is said to be Russian wheat. GTC has committed 120.000 tonnes at $314 per ton C&F (free) and the remainder at $347,50 per ton C&F. After the Buenos Aires stock exchange, the Rosario stock exchange yesterday also lowered the Argentine wheat harvest forecast for 2023/24. Rosario expects a harvest of 15 million tons compared to 15,6 million tons in the previous forecast.