After China, it is now Saudi Arabia that is active in the wheat market. The country has purchased 1,35 million tons of wheat, mainly from Russia. Russian exporters have already had a good export week, the figures show. In the US there is a boost for corn growers, although this was not noticeable on the CBoT last trading session.
The March contract for wheat on the Matif closed yesterday €1,25 higher at €224 per tonne. On the CBoT, grains closed lower. Wheat lost 1,9% to $6.17 per bushel. Corn was down 1,2% to close at $4.77 per bushel. Soy showed a modest increase of 0,9% to $13.27 per bushel.
It seems that the European grain trade is mainly focusing on developments in the Black Sea region. Saudi Arabia has purchased 1,35 million tons of wheat for delivery in the period February to May. The price range runs from $277 to $296 per tonne C&F (free) depending on the port of delivery. Sources report that Saudi Arabia has mainly shopped in Russia. Market agency Ikar has increased the quote for Black Sea wheat by $1 to $242 per tonne FOB (ship delivery). According to SovEcon, Russia exported 690.000 tons of grain last week compared to 610.000 tons the week before. The vast majority, namely 680.000 tons in the export figures, is wheat.
US exporters exported 7 tonnes of wheat in the week ending December 281.697. This is in line with trade expectations. In total, the US has exported 8,6 million tons of wheat in the current season. Exports are therefore 23% behind last season. The lack of new orders from China does not help the mood among players on the Chicago stock exchange.
Green aviation fuel
In the US, there appears to be a green light for bioethanol as a green aviation fuel. Ethanol made from plant material would therefore be eligible for tax benefits. Agricultural organizations and ethanol producers have been lobbying for this for months. About a third of the corn produced in the US is processed into ethanol that is blended into gasoline, among other things. With the increase in electric cars, kerosene could become a new interesting sales market. “While important details of the CO2 model remain to be worked out, we are optimistic that today's guidance could open the door to a tremendous opportunity for America's farmers, ethanol producers and airlines,” wrote Geoff Cooper, president of the Renewable Fuels Association in a statement. Details of the plans will be announced by the US Treasury Department in March.