Prices on the grain market closed largely in the red last trading session. Competition from relatively cheap wheat from Russia and improved weather conditions in South America are cited as important causes. The exception is wheat on the CBoT. The market may already be anticipating the area development in the US.
The March contract for wheat on the Matif closed yesterday €1 lower at €223 per tonne. On the Chicago exchange, wheat was on the rise, closing 0,9% higher at $6.22¾ per bushel. Corn and soy took a step back on the CBoT. Corn closed 0,9% lower at $4.72¾ per bushel. Soy lost 1,1% to $13.12½ per bushel.
Competition from wheat from the Black Sea region is putting pressure on the European market, according to several analysts. The Egyptian state buyer Gasc yesterday closed a tender for 480.000 tons of wheat. As is almost customary, Russian exporters have set the best price at $265 per ton FOB (delivered to the ship). Delivery is February 2024. Jordan did not purchase the 120.000 tonne tender that the country had open. The EU has exported 17 million wheat this season until December 13,98. That is 15,5% less compared to last season.
According to some sources, data from the Risk Management Agency (RMA), which falls under the USDA, indicates that the winter wheat acreage for the 2024 harvest will be smaller than previously expected. There is talk of 0,8 to 1,2 million hectares less compared to 2023. RMA offers, among other things, broad weather insurance for American farmers and therefore has the necessary figures. The official USDA acreage figures for winter wheat will be published on January 12.
Longer time to sow soy
After corn and wheat, the new Argentine government also wants to tinker with the export taxes on soy. The levy on soy oil and soybean meal will be increased from 31% to 33% in the plans. However, the weather reports for South America are the most important factor in corn and soy. Conditions for Argentina and the south of Brazil are characterized as mainly favorable by analysts. Showers are forecast for the north and central part of Brazil. This will not be enough to bring precipitation to the multi-year average level, but it is probably sufficient to resolve the resulting drought stress in the crops and to be able to sow the last corn and soy.
Brazil's Ministry of Agriculture has extended the soy sowing deadline by 13 days for Mato Grosso province. The ministry does this because of the problems with drought. However, farmers' organizations had asked for an extension of 5 days. Growers now have until January XNUMX to sow or resow soy. As a result, up to XNUMX% of the planned soy area could still be sown.