Safe shipping routes are not a guarantee. Ukraine accuses Russia of deploying sea mines and other explosives in the humanitarian corridor. The Kremlin's attempts to raise wheat prices come at the expense of its own exports. As a result, the wheat price took a step up. Corn was under pressure. Market players are more sensitive to lackluster U.S. exports than to rising ethanol production.
The December wheat contract on the Matif rose yesterday by €2 to €231,50 per tonne. On the CBoT, wheat gained 1% to $5.61¾ per bushel. Soybean also inched higher, closing 0,3% higher at $12.91¼ per bushel. Corn closed 0,8% lower at $4.75 per bushel.
Unrest in the Black Sea caused a limited recovery on the wheat market last trading session. The Ukrainian military announced yesterday that Russian warplanes dropped "explosive objects" on the routes used by merchant navy to and from Ukraine's Black Sea ports. Despite Russian attempts at sabotage, the young humanitarian corridor has remained open, according to Ukrainian authorities.
Market agency SovEcon has lowered the export forecast for Russian wheat by 400.000 tons to 48,8 million tons. According to SovEcon, this is the result of attempts by the Russian Ministry of Agriculture to raise the floor price for wheat. In the latest Wasde report, the USDA assumed Russian wheat exports of 50 million tons in the current season. There were reports in the Russian media that the Kremlin is considering suspending durum wheat exports for six months from December 1.
Buyers wait and see
Buyers in the wheat market are keeping a fairly low profile. After the recent price drop, rumors are circulating that China is interested in hard red wheat from the US. We have to take that with a grain of salt, according to various experts. Earlier this week, the story also went around that China is in the market for soft wheat in the US, but there is no confirmation yet that this has actually led to orders. Bangladesh has closed a tender but has not made a purchase. The lowest tender was $295 C&F (delivered). Jordan yesterday announced a tender for 120.000 tons of wheat that will close on November 7.
Corn on the CBoT was under pressure due to somewhat disappointing export demand. Higher ethanol production did not make up for weak export demand. Ethanol production rose to an 1,052-week high at an average of 27 million barrels per day in the week ending October 21,012. Ethanol inventories fell 2021 million barrels to the lowest level since December 175,5. StoneX raised its U.S. corn yield forecast to 175,7 bushels per acre from 15.282 bushels per acre. This brings the total American corn harvest to 388 million bushels (15.302 million tons). That was 389 million bushels (XNUMX million tons) in the previous forecast.