The grain market again showed a mixed picture last trading session. Progress in the US corn and soybean harvests put pressure on prices for these crops. The wheat market is tossing back and forth. Demand from China, disappointing Ukrainian exports and sowing of winter wheat in the US that is going according to plan, to name just a few examples of reports with a contradictory effect on the wheat market.
The December wheat contract on the Matif closed yesterday €2,25 lower at €237,75 per tonne. On the CBoT, wheat inched higher to close 0,2% higher at $5.87¼ per bushel. Corn and soy were down last trading session. Corn lost 1,1% to $4.90¼ per bushel. Soy showed a similar decline, closing 1,2% lower at $12.86¾ per bushel.
In Chicago, the wheat market received support from bargain hunters. The closing price of wheat last Friday cannot really be called a dip, but it was enough to stimulate buying interest. What also helps are rumors of interest from China in American wheat. According to analysts, the pressure on corn and soy put a limit on the increase in wheat.
This week's Crop Progress report only contains harvest progress figures for corn and soy and no longer contains figures on the condition of these crops. The harvest is going fast in the US. 59% of the corn acreage has now been harvested. Last week it was 45% and the five-year average for this week is 54%. Soy has been threshed at 76% compared to 67% in the five-year average and 62% last week. 77% of the planned winter wheat area is in the ground. This means that American growers are slightly behind the five-year average of 78% for this week. 53% of the wheat is at the top, which is equal to the five-year average.
Export
Market agency Ikar has revised the harvest forecast for grain in Russia slightly upwards to 142,2 million tons. The previous expectation was 141,6 million tons. The lower rate of grain exports from Ukraine, which became clear from yesterday's figures from the Ukrainian Ministry of Agriculture, gave the Matif little support. That is not illogical either. Because Russia has withdrawn support for the Black Sea grain deal, Ukraine is largely dependent on exports through the EU. Last week, the Romanian Prime Minister spoke soothing words about increasing transit capacity, but the inflow of Ukrainian grain remains a sensitive issue, especially for five eastern member states. The ample supply of grain from Ukraine remains a factor that regularly surfaces in the European grain trade.
The market prospects for wheat growers do not look bad, according to some analysts. In Argentina it is dry and a moderate to poor wheat harvest is expected. Even more important is what is happening in Australia. The yield expectation was increased by rain in the west of the country, but there is no question of a record harvest as has been the case in the last three years. Geopolitical developments could also provide support to the wheat market. The Black Sea region is restless. The Middle East is now in danger of being added to this list. The conflict in the Gaza Strip has put relations between countries in the region on edge.