It is a mixed picture that the grain market shows today. Wheat continues the trend from before the weekend. A moderate start for winter wheat in the EU and now disappointing yield figures from Argentina are supporting the market. Also in the case of corn and soy, it is mainly South America that makes the music. Rain in Brazil in particular brought some peace to the market.
Wheat started the week in green. On the Matif, the December contract is up more than 0,5% at the time of writing (before market close). In Chicago the increase is even stronger at more than 1% higher. Soy is virtually unchanged compared to Friday's close. Corn is down more than 1%.
Russia expects the transport of goods across the Black Sea to resume today "as far as weather conditions allow." Unsettled and stormy weather caused problems with grain exports last week. These problems were not limited to Russia, Ukraine also experienced problems. In addition to storms on the Black Sea, the supply of grain from farms to the ports is also difficult due to the approaching winter.
Moderate wheat yield expected
The level of winter wheat in the EU remains a concern. In France, the EU's largest wheat producer, 83% of the planned winter wheat area has been sown up to December, compared to 99% last year. Of the area that has been sown, 80% is in good or excellent condition, compared to 98% last season. The combines operate in the southwest of Argentina. However, yields in this region are not that bad, according to the report crop tour of the Bahia Blanca grain fair. For the southwestern region, the fair estimates the harvest at 2,8 million tons. That is 27% less than last season. The fair came to this conclusion after samples were taken from 250 plots. In the southwest, approximately 1,2 million hectares of wheat are grown, which is more than 20% of the Argentine acreage. Further towards the coast, yields are better according to some sources, but these are not included in the figures for Bahia Blanca.
Precipitation is welcome
Rain that fell in the western and central part of Brazil last weekend brings some calm to the soy market. Field work has continued despite the showers, according to market agency Pátria Agronegócio. However, the sowing of soy is still significantly behind last season. Now 88% of the planned area is in the ground compared to 93% sown in the same period a year earlier.
StoneX came up with a new revenue forecast for Brazil. Compared to the previous estimate, the expected soy yield has been reduced by approximately 3 million tons to 162 million. If that is achieved, it will still be a record harvest. StoneX has only made limited adjustments in maize. The estimate for the first corn crop has been reduced by 300.000 to 27 million tons. However, most of the corn is a second crop after soy and StoneX has adjusted the yield downwards by more than 1,5 million tons to 97 million tons. Soya is sown relatively late, which means that the second crop of maize can only be planted later. Some analysts expect that we may therefore see larger corrections in yield forecasts further into the growing season.