After exploring the soil, wheat is on the rise for the second day in a row. Potential additional demand from North Africa mainly affects the Matif. In Australia, heavy showers are now causing problems for grain growers in a season that has so far been characterized by drought. Corn was under some pressure due to developments in the oil market.
The December wheat contract on the Matif closed yesterday €4,75 higher at €219,75 per tonne. On the CBoT, wheat rose 2,3% to $5.56 per bushel. Soybean moved sideways to close ½ higher at $13.47 per bushel. Corn closed 0,4% lower at $4.49¾ per bushel.
Morocco has presented a plan to subsidize wheat imports of up to 2,5 million tons in the first four months. The Moroccan government is forced to do this in order to have sufficient wheat after a disappointing harvest in its own country. Analysts call this a boost for European exports, which have so far remained somewhat disappointing.
Unfair competition
The export of grain from Ukraine to the EU remains a tricky issue. After Polish growers protested against the influx of relatively cheap grain from Ukraine, it is now the transporters who have taken over. Polish transporters complain that Ukrainian companies not only make trips between Ukraine and Poland, but then also transport further into the EU at lower rates. Polish drivers have blocked border crossings between Poland and Ukraine. According to the European Commissioner for Transport, Adina Valean, the blockages are completely unacceptable. "While I support the people's right to protest, the entire EU - not to mention Ukraine, a country currently at war - cannot be held hostage by blocking our external borders," Valean said. She further criticizes the role of the Polish authorities who, according to her, do nothing to enforce the law at the border. The European Commission reserves the right to intervene to ensure that the rules are enforced and the law is complied with. The Polish drivers who have been protesting since November 6 are demanding that the permit system be reintroduced, with the exception of humanitarian and military goods. The transport permits were canceled by the EU last year after the Russian invasion.
Rain after sunshine
Heavy rain showers have caused crop damage in southeastern Australia. In parts of New South Wales, more than 200 millimeters fell in one day and in Victoria more than 80 millimeters fell locally, according to the Australian Meteorological Service. According to local sources, around 100.000 tonnes of wheat could be lost due to the showers and around 1 million tonnes could be downgraded to feed wheat. The growing season in Australia has so far been mainly dominated by heat and drought. Yield forecasts were in the range of 25 to 28 million tons of wheat, compared to 40 million tons last season. Due to the dry season, analysts assumed that the quality of wheat in Australia would be fine.
Corn in the US was hit yesterday by disappointing ethanol production. At 1.011 barrels, production fell to the lowest level in seven weeks. This fits in with the pattern on the American oil market, where demand for gasoline fell by 3% last week compared to the previous week. With relatively large inventories and demand that is not excessively high, there are few bulls in the North American corn market. However, the major uncertain factor remains South America, where the weather is not cooperative for both corn and soy cultivation.