Analysis Grains & Commodities
Drought makes less impression on the grain market
The Black Sea region continues to make an important mark on the European grain trade. In particular, the differences of opinion about the import of grain from Ukraine are keeping people busy. In the US, the influence of weather reports on the grain market is decreasing somewhat. Some analysts do wonder how justified this is now that the harvest is approaching.
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Choose the subscription that suits youThe December wheat contract on the Matif closed €4 higher yesterday at €242 per tonne. On the CBoT, wheat showed a small downward correction of 0,6% to settle at $5.93¾ per bushel. Corn also lost slightly, closing 0,4% lower at $4.80½ per bushel. Soy was on the rise on the Chicago stock exchange and closed 0,8% higher at $13.60½ per bushel.
The mood on the European grain market is still largely determined by developments in the Black Sea region. Ukraine and five EU member states are on a collision course when it comes to grain imports. Ukraine does not want to know about an extension of the import restrictions that the EU introduced under pressure from the five countries. That package expires today and Hungary has already indicated that it will not shy away from unilateral measures to protect its own farmers if Brussels does nothing. Ukraine threatens to go to the WTO again if that happens.
Yesterday it was announced that Cargill would transfer its share in the Russian grain terminal to the Delo Group. Cargill announced in July 2023 that it would stop exporting Russian grain. According to the Americans, the sale of the 25% share in the KSK terminal to Delo fits in with this strategy, Cargill wrote in a statement.
Drought makes less of an impression
The grain market currently seems a little less impressed by the weather reports in the US. Several analysts doubt whether this is entirely justified. The weather in large parts of the country is not exactly favorable for the ripening of corn and soy. Too little moisture also costs tons of money in this phase of the growing season. This was also somewhat reflected in the USDA's Crop Progress report earlier this week. And the drought is not over yet, as appears from the drought monitor published yesterday. The drought continued to spread on the prairies and in the western cornbelt.
And the drought is not only having consequences for corn and soy. The time has now come again to sow winter wheat. Some sources report that growers are just waiting in the hope of being able to sow under better conditions later. The wheat does nothing in the dust.
