In the Netherlands, things are not going very smoothly with the formation of a new cabinet. The fact that a new political wind does not mean a turnaround in all areas is evident in Poland, where Tusk's government maintains trade restrictions on grain from Ukraine. Currency fluctuations are causing opposing movements in the grain markets in Paris and Chicago.
The March wheat contract on the Matif closed €4,50 lower at €223 per tonne. On the CBoT, wheat rose 1,7% to $6.15¾ per bushel. Corn moved mostly sideways last trading session, eventually closing ¼ cent lower at $4.79¼ per bushel. Soy closed 0,5% higher at $13.14 per bushel.
Poland has a new government without the right-wing conservative Pis party. The policy regarding the import of agricultural products from Ukraine will not be changed. "I will do everything to maintain the current embargo," several Polish media quoted the new Minister of Agriculture, Czeslaw Siekierski. Under the current arrangement, Ukraine is not allowed to export certain agricultural products, including wheat, to Poland and other eastern member states. The transit of these goods is, however, permitted.
High demand for wheat from the US
US wheat exporters have had a very good week. This did not come as a surprise after the great Chinese interest in American wheat. Total export sales for the week ending December 7 amount to 1,5 million tonnes. That is the largest weekly volume since 2007. Saudi Arabia's state grain buyer GFSA yesterday prepared a tender for 715.000 tons of milling wheat. Intended delivery dates are February and March. Japan has purchased more than 100.000 tons of wheat from Canada and the US, according to some sources.
In the US, the dollar exchange rate is helping grain exporters. Due to a drop in price, American wheat has become more attractive on the world market. In the EU, exactly the opposite is happening. The Matif is under some pressure because traders are worried about a too strong euro. What European exporters take heart from is that Russia appears to have found the bottom in the wheat market and does not want to drop the price any further. Offers at competitive prices from the Black Sea region have certainly not done any good to exports from the EU, several analysts say.
Doubt
In Argentina, the wheat harvest is 55% complete, according to the Buenos Aires grain exchange. After the lack of clarity about the export policy of the new Argentine government, the Buenos Aires stock exchange is now causing unrest. According to the stock exchange, the condition of maize has improved with 40% of the area being good or excellent compared to 36% last week. Soya actually deteriorated to 30% good or excellent from 35% in the previous publication. That's hard to reconcile. Buenos Aires writes that 49% of the planned corn area has been sown. The Rosario grain exchange estimates that 60% of the corn is already in the ground.