The wheat market remained captivated last trading session due to limited demand on the world market despite reasonable export figures from the US. Supply from Russia and a good start of winter wheat weighed more heavily on market players. Brazil is the flavor maker in corn and soy. After a very favorable cultivation last season, it is now time for Brazilian farmers to settle. Other crops are also being looked at, according to experts.
The December contract for wheat on the Matif closed €2,50 lower yesterday at €224,25 per tonne. Wheat also suffered slightly on the CBoT. Chicago's December wheat contract fell 1,3% to $5.43½ a bushel. Corn continued to move sideways, eventually gaining a modest 0,5% to close at $4.69½ per bushel last trading session. Soy was clearly on the rise, closing 2% higher at $13.67¼ per bushel.
Wheat was the weaker brother in the grain complex last trading session. According to several analysts, this is mainly due to somewhat disappointing demand on the global market. Wheat exports from the US, at 13 million bushels, are neatly in line with trade expectations. Exports at this level are also necessary to stay in line with the USDA's export expectations.
Russian grain exports have taken a step back. SovEcon writes that Russia exported 810.000 tons of grain last week. That is a decrease of 9% compared to a week earlier. With 750.000 tons, wheat is by far the largest product in Russian export figures. The price of Russian wheat remains stable. Ikar quoted $230 FOB (delivered to ship) for Russian wheat.
Wheat is almost there
In the US, 95% of the planned winter wheat acreage has been sown, the USDA announced in its weekly Crop Progress report. Last year it was 98% this week and the five-year average is 96%. The growth of winter wheat is ahead. This season is 87% above, compared to 86% last year and 85% in the five-year average. The condition of winter wheat has improved this week. 48% of the area received a good or excellent rating this week, compared to 47% last week. Last year this week, 32% of the wheat was good or excellent.
Corn is 93% grown in the US. This means that American farmers are ahead of the five-year average of 91%, but behind last season when the corn harvest was 96% completed this week. The soy harvest is so advanced that it is no longer included in this week's Crop Progress report.
King cotton
Brazil is giving the market a boost in corn and soy. Brazil's AgRural estimates that 80% of the first crop of maize has been sown in the country. However, most of Brazil's corn is sown as a follow-up crop after soy. Of the planned soy area, 68% is in the ground. Last week the counter stood at 61%, but last year this week 80% of the soy had already been sown. The weather seems to be improving somewhat for Brazilian farmers. In the south where it is extremely wet, the showers will disappear according to weather forecasters and more to the north where drought is a problem, rain is expected. Nevertheless, it is becoming too late to sow soy and then grow a good crop of corn, according to various experts. Some soy plots that were sown on time did not get going and will probably have to be resown. According to some sources, farmers in Mato Grosso province may opt for cotton in places where soy has not emerged. The cotton growers' association AMPA expects the cotton area to grow by 8% to approximately 1,3 million hectares. Another option that often comes up is for growers to discard a failed soy crop and opt for corn. The system of two crops in one season will then be abandoned.