The grain market took a step back across the board last trading session. In the wheat market, it is mainly Ukraine that sets the tone. Exports remain a difficult issue, but market players are becoming more convinced that Ukrainian grain will somehow become available on the world market. In the US, the USDA released the new Crop Progress report this week, which contains only minor adjustments.
The December contract for wheat on the Matif gave up €5 yesterday to close at €238,50 per tonne. Grain prices on the CBoT were also down last trading session. Wheat fell 2,3% to $5.91¼ per bushel on the Chicago exchange. Corn fell 1% to $4.71½ per bushel. The November soy contract was in between, losing 1,8% to close at $13.16¾ per bushel.
The mood on the wheat market is largely determined by developments in Ukraine. The first ships loaded with grain in the Odessa region have sailed across the Black Sea. There has so far been no response from the Kremlin to this 'humanitarian corridor' across the Black Sea that Ukraine has established. Will Russia come up with countermeasures later or will Putin leave it at that? According to analysts, the chance of the latter is not very high, but the arsenal that Russia can draw from is not huge either.
Exports via the EU are perhaps even more important for Ukraine at the moment and there is a lot to be done about this. Brussels has lifted import restrictions, but three member states have gone against this and imposed their own bans. Ukraine has filed an official complaint about this with the World Trade Organization (WTO). The request was received by the WTO on Monday evening, the organization confirmed to the Reuters news agency today (Tuesday, September 19).
Harvest is ahead, sowing is behind
The US Department of Agriculture released the weekly Crop Progress report last evening Dutch time. The USDA did not make any major adjustments in the condition of corn and soy. Of the corn area, 51% received a good or excellent rating compared to 52% last week. Soy remained the same with 52% of the area being good or excellent. The harvest of these crops has slowly started. At 9%, the corn harvest is slightly ahead of the five-year average of 7%. 5% of soy has been threshed compared to 4% in the five-year average.
The spring wheat and barley harvests are near abyss in the US with both 93% of the acreage threshed. For spring wheat this is equal to the five-year average, while the barley harvest is slightly behind. The five-year average for barley is 95% harvested for this period. Winter wheat sowing is progressing steadily. Until September 17, 15% of the planned area has been sown. The five-year average is 16%. Last year, 19% of the winter wheat had already been sown.
The fact that the corn and soy harvest is somewhat ahead of the multi-year average is probably due to drought in the US. The crops therefore ripen faster. According to some analysts, the drought is also the reason why sowing winter wheat is a bit slower. Moisture is needed for the wheat to grow. The fact that sowing wheat is slightly slower than average is not something to immediately worry about.