Export remains an important theme in the grain trade. There is some grumbling in the EU due to competition from the Black Sea region after some disappointing export figures. In the US, the wheat market is gaining momentum due to high demand from China. Furthermore, the results of an Egyptian tender were announced and Australia came up with a new yield forecast.
The December wheat contract on the Matif closed yesterday €8 lower at €215,75 per tonne. The most traded March contract showed a much smaller decline from €2 to €229,75 per tonne. On the CBoT, the December wheat contract rose 4,2% to $6.20¾ per bushel. The March contract rose 3,4% to $6.31¼ a bushel. Corn was also on the rise, gaining 1,8% to $4.68½ per bushel. Soy moved sideways last trading session, closing ¾ cent lower at $13.05½ per bushel.
The EU has exported 3 million tonnes of wheat this season until December 12,52. In the same period last year this was 15,26 million tons. The export of barley is keeping pace with last season with 2,79 million tons this season compared to 2,81 million tons last season. 7,36 million tons of corn were imported this season, compared to 12,88 million tons a year earlier. According to analysts, European exporters continue to suffer from the supply of relatively competitively priced wheat from the Black Sea region.
Egypt only purchases Black Sea wheat
The Egyptian state buyer Gasc has purchased 180.000 tons of wheat in a tender. Of this, 120.000 tons come from Russia. The price tag is $255 per ton FOB (delivered to the ship). Payment would be made via letters of credit with a payment term of 270 days. The remainder of the tender, 60.000 tons, comes from Ukraine. For the Ukrainian wheat, $250 per ton is paid FOB, payable upon delivery. Delivery time for the tender is the end of January, beginning of February. According to SovEcon, Russian wheat exports for November amounted to 3,4 million tons. That is 900.000 tons less than in the same month last year. According to SovEcon, the smaller exports are due to turbulent weather in the Black Sea, which has disrupted shipping.
The Chicago stock exchange continued to cheer after the order for 440.000 tons of wheat from a buyer from China. That is the largest purchase in more than ten years according to various sources. Yesterday the USDA announced an order from China for 198.000 tons. Not bad sales figures just in two days.
Drought damage in Australia is not too bad
In Australia, government agency Abares has published new yield forecasts. Compared to the forecast in September, expected yields have been adjusted upwards, but it will certainly not be a top harvest. For wheat, Abares expected a harvest of 25,5 million tons, compared to 25,4 million tons in September. This means the harvest is 37% smaller compared to the very good harvest last season. For barley, the agency expects 10,8 million tons compared to 10,5 million tons last season and for rapeseed 5,5 million tons against 5,2 million tons. The total harvest of winter crops amounts to 46,1 million tons, according to Abares. That is a third less than the record harvest of the 2022/23 season and just slightly below the ten-year average.
The reason for the lower yields is the long dry growing season in Australia. Just as the harvest has started, a lot of rain has fallen in parts of Australia. Concerns about the quality of wheat are therefore increasing. Baking wheat may disappear into the feed. Threshing is also not made easier by camping in places where a downpour has fallen.