The news on the grain market is the new edition of the Wasde report. The tone is bearish this month for both grains and oilseeds. This was especially unexpected for wheat. In addition to the news from the US, recent developments in the Black Sea region provide food for thought.
The December wheat contract on the Matif fell by €2,50 yesterday to close at €233,25 per tonne. On the CBoT, wheat lost 1,9% to $5.80¾ per bushel. Corn showed a similar move, closing down 1,7% at $4.68 per bushel. Soybean is on par, closing 1,6% lower at $13.27¾ per bushel.
The November edition of the US Department of Agriculture's Wasde report, which was released last night Dutch time, is slightly bearish in tone. The total amount of wheat available this season is 1.051,5 million tons, according to the USDA. That is 0,6 million tons more than in the previous edition of the report. The adjustment is a case of larger beginning inventory more than making up for lower production. Wheat production has also been reduced by 1,5 million tons to 782 million tons. Wheat yields have been reduced in Argentina, India, Kazakhstan, the UK and Brazil, among others. Total wheat consumption has remained virtually the same at 793 million tons. The expected ending stock for the 2023/24 season has been increased by 0,6 million tonnes compared to the October edition of the Wasde report to 258,7 million tonnes.
US thirsts more corn
In the coarse grains (corn, barley, etc.), both production and ending stocks have increased. The US corn harvest has increased by 170 million bushels to 15,2 billion bushels (approximately 386 million tons). The average yield in the US is 174,9 bushels per acre compared to 173 bushels per acre in the previous report. This came as a surprise to many analysts. Worldwide, feed grain yields for Ukraine, Russia, Burma and Paraguay have increased. The expected final stock of coarse grains has been adjusted upwards by 2,6 million tons to 315 million tons.
Global soy production has increased by 0,9 million tons to 400,4 million tons. Total production of oilseeds increased by 2,1 million to 661,5 million tons. The closing stock of oilseeds has been adjusted downwards by 0,5 million tons to 131,4 million tons.
Freight rates are skyrocketing
Ukraine says that despite the missile attack earlier this week on the merchant ship flying the Liberian flag, the humanitarian corridor will continue to operate. According to Ukrainian authorities, six ships have since left the port of Odessa, carrying a total of 230.000 tons of agricultural goods. The attack was not entirely without consequences. Reuters news agency reports today that sea freight rates to or from Ukraine have increased by approximately $20 per tonne. In addition, shipowners are reluctant and prefer not to allow their ships to sail in this region with an increased safety risk.