The downward trend in the grain market continued last trading session. Wheat in particular is having a hard time. Remarkably, Russian exporters do not care much about this. In the US, winter wheat is doing relatively well, as this week's Crop Progress report also shows. The corn harvest in the US is almost ready. However, corn and soy traders mainly pay attention to developments in South America.
The December wheat contract on the Matif closed yesterday €6 lower at €213 per tonne. Wheat also took a significant hit on the CBoT, losing 2,6% to $5.34¼ per bushel. Corn was also in the red, closing 1,7% lower at $4.55½ per bushel. Soybeans moved mainly sideways, falling 1 cent to $13.29¾ per bushel.
Players on the wheat futures market are reducing their long positions, according to analysts. This is partly due to the fact that the December contracts are running out. The decline in the December contract is sharper than in the March contracts. Underlying, the somewhat weak exports in both the EU and the US continue to weigh on the market. A price level is being sought at which exports will pick up again.
While wheat prices are under pressure in the west, Russian wheat is climbing slightly. Market agency Ikar has increased the quotation for Russian Black Sea wheat by $5 to $235 per tonne. Export does not happen automatically in Russia either. According to SovEcon data, Russia exported 720.000 tons of grain last week, compared to 810.000 tons a week earlier. Of Russia's grain exports last week, 560.000 tons were wheat.
Final report without surprise
In the US, winter wheat for the coming harvest is doing well. In the latest USDA Crop Progress report, 50% of wheat acreage is rated good or excellent compared to 48% last week. 91% of the sown area is above, just slightly higher than the five-year average of 89%. The corn harvest is almost complete with 96% threshed. The five-year average for this week is 95% and last year 99% was received this week. This edition of the Crop Progress report was the last for the 2023 season. The next report will be released on April 1, 2024.
Developments in South America remain an important factor in corn and soy. The weather premium on these crops has been reduced somewhat after scattered showers in the central and southern part of Brazil. AgRural estimates that 83% of the planned area of corn has been sown as a first crop and 74% of soy. The spring work therefore continues to lag behind last season. The various yield forecasts for soy do not reflect the later start of the growing season. Various agencies expect a Brazilian soy harvest of more than 160 million tons. The USDA assumed 163 million tons in the last Wasde report. If these expectations are actually realized, the record harvest of 158 million that was achieved last season would be broken.