The Polish government continues to walk on eggshells when it comes to Ukraine. Today, Polish farmers resumed the blockade of the border due to the lack of firm guarantees following commitments from the Polish Minister of Agriculture. In the US, the condition of winter wheat has improved in key states, while outwintering is looming in Russia.
The March wheat contract on the Matif closed yesterday €1,75 lower at €219,75 per tonne. Wheat also posted red numbers on the CBoT, closing 1,1% lower at $6.00¼ per bushel. Corn and soy moved mainly sideways last trading session. Corn added 0,3% higher to $4.65¼ per bushel. The March soybean contract also closed 0,3% higher at $12.77 per bushel.
Polish farmers resumed the blockade of the border crossing into Ukraine at Medyka today. This was reported by the Polish news channel Polsat News. The blockade was lifted just before Christmas after promises from the Polish Minister of Agriculture and the governor of the region to secure government subsidies on grain and to cancel tax increases. A written statement from Polish Prime Minister Donald Tusk making these commitments official has not been forthcoming. “We want to sign a bilateral agreement,” said Roman Kondrow, leader of the farmers' protest, at a press conference this morning. “Once such an agreement is reached, the protest will be suspended provided our demands are met.”
It is not only among farmers that there is dissatisfaction about unfair competition from Ukraine. Truck drivers have been blocking border crossings into Ukraine since November 6. They want the licensing system for Ukrainian transport companies to be reintroduced. Now Ukrainian transporters are also allowed to carry out transport within the EU. Tusk said in December that he thought he was close to a solution for the Polish transport sector.
Wheat status in the US improved
In the US, seven states have published figures on the condition of winter wheat. In Kansas, Oklahoma, Texas and South Dakota the crop is in better shape compared to the end of November, while in Colorado, Montana and Nebraska winter wheat has declined. The improved situation in the large wheat states of Kansas and Oklahoma in particular weighed heavily on the CBoT, according to analysts. In addition, American exporters are suffering from the rising dollar. This makes American wheat more expensive for buyers outside the US.
Colder weather is forecast for the wheat regions of eastern Ukraine and western Russia this weekend. In Moscow the mercury dropped to -30 degrees Celsius yesterday, well below the average temperature for early January. According to weather reports, that cold area is expanding further south. Overwintering grain is a real risk at such temperatures, but the market paid little attention to this yesterday.