Export figures and growing conditions determine the mood on the wheat market. Wheat exports from the EU continue to lag behind compared to last season. There is demand for wheat, as shown by two tenders that have been closed. In the US, the USDA figures on the state of wheat in the country are still being worked out. In Australia the growing season is certainly not going well. After an extremely dry September, October was also very dry.
The December contract for wheat on the Matif closed yesterday unchanged at €232,25 per tonne. Grain prices were under pressure on the Chicago stock exchange. Wheat lost 1% on the CBoT to $5.70¼ per bushel. The December corn contract fell even more steeply, down 1,8%, to close at $4.68½ per bushel. The November soybean contract closed up 0,6% at $13.48¾ per bushel.
The EU has exported 9,95 million tons of wheat in the current season. Last season, the counter stood at 13,25 million tons this week. Analysts see the lower European export figures as confirmation that Russia and Ukraine are gaining market share. The price for Russian wheat delivered to the Black Sea is slightly on the rise. Market bureau Ikar quoted $226 per tonne for Russian wheat, $2 higher than the previous week. The weekly export is slightly lower. SovEcon writes that Russia exported 900.000 tons of wheat last week compared to 1.080.000 tons a week earlier.
Tenders
Jordan has secured 60.000 tonnes of wheat in a tender at $276 per ton C&F (free), according to grain trade sources. Algeria has purchased 180.000 tons of wheat for approximately $266 tons C&F. The country of origin of this wheat is probably Russia. That would equate to a FOB price of approximately $245 per tonne.
On the stock exchange in Chicago, wheat was still affected by the USDA's Crop Progress report earlier this week. The condition of the winter wheat has improved and half of the area is rated good or excellent. In addition, the disappointing export of wheat from the US is worrying market players.
There is a windfall for American traders regarding the export of soy. Reuters news agency reports that China yesterday placed the largest order for soy from the US in three months. China is said to have purchased approximately 600.000 tons of soy for delivery between December and March. This provides support to the American market. Brazil has been dominant in soy and corn on the world market for a relatively long time this season. The result is that American exports are faltering somewhat.
Second dry month
Australia has had its driest October in more than twenty years. The Australian Meteorological Institute announced this. In the province of Victoria, the precipitation sum was below the multi-year average. The province of Western Australia even had the driest October since measurements started. Western Australia is the country's largest grain exporting province. Last September was also the driest since measurements started in 1900. After three years with more than enough rain, the El Niño weather phenomenon is now causing warm and dry weather in Australia. The lack of moisture affects the grain crops. The yield of winter wheat this season is estimated to be 35% lower compared to last season at 26 million tons.