The grain market has not started the new week with any major changes. At the time of writing before the market closed, the Matif is down a few tenths of a percent, while wheat on the CBoT shows a similar change, but up. In maize, the increase has so far also been limited to tenths of a percent. Soya is on a stronger rise and is now more than 1% higher compared to last Friday's closing price.
The growth of the winter wheat area in the Northern Hemisphere remains limited. This is what the UN Food and Agriculture Organization (FAO) expects. Lower wheat prices are reducing interest in the crop among farmers. For South America, the FAO predicts a shrinkage of the corn area in both Argentina and Brazil. The FAO has indications that Brazilian farmers are sowing approximately 5% less corn and opting for soybeans instead. No percentage is mentioned for Argentina, but a similar trend is expected there.
All or nothing
The golden mean is missing in Brazil. Either it is much too wet or much too dry for soy and corn cultivation. In the south of Brazil, the rain was not too bad last weekend, but that does not mean that growers can enter the fields. The soil is so saturated that it will take some time before the land is developed. In fact, some of the soy that was sown will probably have to be resown because it has drowned. The dry eastern part of Brazil has seen showers in recent days. Local sources are not very positive about this. All the rain is a bonus, but this is not enough to make a dent in a pack of butter.
India wants to extend the current food program, which provides free grains for human consumption, for another five years. Indian Prime Minister Modi said this. In this way, the Indian government wants to protect consumers against increases in grain prices. There will be elections next year and this decision cannot be viewed entirely separately from that. The internal politics will most likely remain without consequences for the international market. In order to be able to purchase sufficient grain below the threshold value, export restrictions are unavoidable. In addition, the growing season in India is not going well either. For the first time in eight years, the rice harvest this year may be lower than the year before. Top yields were also not achieved in wheat last season.