Players in the grain market are fickle. A third large wheat order in a row from China moved the CboT less than we have seen in recent days. Russia carried out a drone attack on the Ukrainian port infrastructure on the Danube last night. Although a large number of the drones were disabled in time, according to Ukraine, there was one fatality and there was considerable damage. Brazil has been in the news lately due to problems in the current growing season. But for 2023, the country is on track for record exports of both corn and soy.
The December contract for wheat on the Matif rose yesterday by €4,25 to €220 per tonne. The March contract, where most trading takes place, increased by €2,25 to €232 per tonne. On the CBoT, the December wheat contract fell 0,8% to $6.15¾ per bushel. The March wheat contract recorded a modest plus, closing 0,4% higher at $6.33½ per bushel. The March corn contract took a step back to close 1,3% lower at $4.84¼ per bushel. Soybean was also down a bit, closing 0,8% lower at $12.95½ per bushel.
The Chinese buying frenzy on the wheat market is not over yet. Yesterday, the USDA announced that China has purchased 372.000 tons of wheat from the US. In total, Chinese buyers have now purchased 2 million tons of wheat in the US this season, including 1 million tons in the last three days. That 2 million tons is the third largest sales to China since 2008. Nevertheless, the rally of wheat on the CBoT is slowing down. This is partly because the technical analysis appears to be running out of wheat overbought terrain. In addition, trading is somewhat cautious in the run-up to the December edition of the Wasde report, which will be released on Friday evening Dutch time.
Export issues
Russia has carried out a new drone attack on Ukrainian port infrastructure on the Danube. The governor of the Odessa region announced this today. A driver was killed in the attack, which lasted more than two hours. Most of the drones were neutralized in time, but a grain storage facility, an elevator and several trucks were nevertheless damaged by the attack. The export of Ukrainian grain by land is hampered by blockages by Polish drivers.
According to Spike Brokers, food exports by road fell 30,6% in the first four days of December, Reuters reports. In the first four days, 50.000 tons were exported compared to 72.000 tons in the same period in November and 71.000 tons in October. About half of Ukraine's overland exports go via Poland. Due to dissatisfaction about unfair competition from Ukrainian transport companies, protests have been taking place at border crossings in Poland since November 6.
Brazil is on track to export record amounts of corn and soy. This is stated by the trade association Anec based on the planned ship transports for the last weeks of the year. Corn exports in 2023 would amount to 55,94 million tons, according to Anec. That was 44,7 million tons last year. Soy exports are absolutely spectacular at 101,1 million tons. By comparison, Brazil exported 2022 million tons of wheat in 77,8.