Analysis Grains & Commodities
American grain market shows more courage than European one
The military violence in Ukraine is causing more commotion in America than in Europe. For traders on the Matif, it almost seems like a matter of looking after the shop and not doing anything crazy until everyone has returned from the Christmas holidays. Still a cultural difference with colleagues on the other side of the Atlantic Ocean. At the CBoT they are not afraid to cause a stir.
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Choose the subscription that suits youThe March wheat contract on the Matif closed yesterday €0,50 higher at €221,75 per tonne. On the CBoT, wheat rose even faster, rising 1,4% to $6.31½ per bushel. Corn and soy took a step back in Chicago. Corn closed 0,5% lower at $4.74¼ per bushel and soy lost 0,9% to $13.05¼ per bushel.
Russian naval mine
Yesterday's incident in which a bulk carrier struck a Russian naval mine in the Black Sea made a bigger impression on the American market than on the European one. Security on the humanitarian corridors (as Ukraine calls the new routes since the cancellation of the Black Sea grain deal) is at risk. Analysts differ about the consequences for the availability of grain from the Black Sea region. After all, Ukraine already relies heavily on grain exports overland and via the Danube. Things don't seem to be calm in Ukraine. Several sources report that Russia carried out a large-scale airstrike on several cities in Ukraine this morning.
Tender cancelled
Egypt canceled a wheat tender yesterday. Prices were too high according to state buyer Gasc. Opening a tender and then canceling it if they do not like the prices is often done by Gasc. Analysts call it a tactic designed to drive down prices. Whether that will work this time remains to be seen. A price of €220 per tonne has proven to be a fairly solid bottom on the Matif in recent months. Trips there were of very short duration.
Early harvest in Australia
In Australia, the weather is also not helping grain growers. The growing season was warm and dry until thunderstorms at the end of November threw a spanner in the works. The rain late in the season has caused damage mainly to rapeseed and lentils, but the quality of wheat has also not improved. The grain harvest is progressing at a rapid pace. Local sources report that the grain harvest in the province of South Australia is almost over. It is not often that growers finish threshing before Christmas. Yields are around or slightly above the multi-year average, according to various reports. In its latest forecast, the USDA assumed an average wheat yield of two tonnes per hectare in Australia. That is a third less than last season when a record harvest was harvested.
