European exporters are not yet catching up with wheat exports, as evidenced by EU figures. Exports are not only proving somewhat difficult in the EU. For Ukraine it is a very difficult puzzle to solve. In soy, the focus is on exports and it is the weather reports that are once again in the spotlight.
The December wheat contract on the Matif gave up €2 yesterday to close at €231,75 per tonne. On the CBoT, wheat was also down, falling 1,3% to $5.72 per bushel. Corn and soy moved more sideways. Corn closed 0,2% higher at $4.78¼ a bushel. The November soybean contract traded ¾ cent higher at $13.68¾ per bushel.
Wheat exports from the EU continue to lag behind last season. This season, 10,8 million tons of wheat were exported compared to 13,7 million tons in the same period last season, according to export figures published yesterday. Morocco and Nigeria are the largest buyers of European wheat with 1,7 and 1,2 million tonnes respectively. That is reasonably in line with last season's imports. So far this season, Algeria has imported 936.000 tons of wheat and Egypt 560.000 tons. This means that imports for both countries are approximately 1 million tons below the level of last season. The vast majority of wheat that the EU imports comes from Ukraine. With 2,1 million tons, Ukraine accounts for almost two-thirds of European imports.
Transport is pinching
Ukraine's grain exports across the Black Sea remain a tricky issue. Since August, Ukraine says it has exported 4 million tons of grain through the new humanitarian corridor. Insuring ships on this route is possible, but insurers do add a generous risk premium, especially after the recent attack on a Liberian cargo ship. Ukraine and Great Britain have now set up a special scheme that allows the war premium charged by insurers to be reduced. According to Ukraine, fourteen insurers could charge lower premiums. Not everything is running smoothly when transporting grain to the Black Sea ports in the Odessa region. The national railways have had to reduce capacity towards the ports due to repairs needed on the track.
The fact that the European export pace is somewhat low has only limited influence on the Matif. Some analysts write that there is still some room to the downside with a bottom in the market at more than €200. Broadly speaking, the prevailing sentiment is that the bottom will remain around €230. The moderate growing conditions in Europe due to the rain provide the wheat market with extra support, according to these analysts. Of course, it must be said that the weather in autumn is not the most important factor determining yield. What happens next spring and summer is more important.
Brazilian soy is not a certainty
In soy, there is a trade-off between export figures and weather reports. No new orders were announced from China yesterday, so analysts have again focused on the weather reports for South America. The authoritative Brazilian market agency AgRural reports that 61% of the planned soy area is in the ground in Brazil. Last week it was 51% and last year around this time 69% of the soy had already been sown. The yield forecast for soy this harvest has been reduced by 1,1 million tons compared to the October estimate, to 163,5 million tons. Heat and drought in one part of Brazil and flooding in the other are the main causes of this. The fact that the growing season in Brazil is not starting according to the book is clearly visible in the message below.