It is wet and not only in the Netherlands. Sowing winter grains is therefore delayed. It is certainly not a race for what is in the ground, as can be read in the November edition of the Mars bulletin. However, there is only limited attention to this on the futures markets. Faltering export figures are generating more interest.
The December wheat contract on the Matif gained €2 yesterday to €215 per tonne. On the CBoT, wheat was on firmer footing, closing 1,8% higher at $5.43¾ per bushel. Soy also found its way up last trading session, gaining 1,3% to close at $13.46½ per bushel. Corn showed a decline of 0,9% to $4.51½ per bushel.
The wheat market rebounded, especially in the US, after Monday's sharp drop. This is partly caused by bargain hunters who have stepped in. Tenders from buyers from South Korea, Taiwan and Jordan gave the market an extra boost. The export count of wheat from the EU until November 26 stands at 12 million tons. This means that exports are 18% behind last season.
The Russian Ministry of Agriculture reports that the country's grain harvest is 98% complete. The total harvested volume is 151 million tons according to the ministry. Almost two-thirds, namely 99 million tons, is wheat. The wheat yield is therefore well above the expectations of the USDA, which estimates the American harvest at 90 million tons.
Disagreements
Relatively large wheat stocks on the European continent largely determine the mood on the market. According to some analysts, because of this large supply, it is only logical that the wheat market will continue to seek the bottom for the time being. Combine that with a good start for winter wheat in the US (50% of the area is in good or excellent condition compared to 34% last season) and the negative mood will continue for a while. Another group of analysts is more convinced of this reasoning. Wheat prices hovering around $220 aren't encouraging sellers to hurry. Space downwards is logically smaller than space upwards. This time last year the Matif was around €300. It could be that sellers therefore only offer a limited supply. Winter has arrived in the Black Sea region. Both Russia and Ukraine therefore have difficulty transporting grain. And this is partly reflected in the recent export figures.
Flooding and drought problems
In the longer term, there are concerns about winter crops in Europe. This was confirmed again this week in the November edition of the European Commission's Mars bulletin. In large parts of Europe, rain has delayed the sowing of winter crops. In the southeast (Romania and Bulgaria) drought is putting crops at a disadvantage. Sowing winter grain is still possible in the coming weeks, but it must be dry and frost must not occur immediately, the Commission writes. It is therefore expected that part of the planned area of winter grains will be replaced by summer grains. The Commission also writes that some winter grain will probably have to be resown due to water damage.