A tender for wheat from Egypt is restoring confidence in wheat. The state buyer's trick to lower the wheat price did not work. In the US, advances are already being made on the WASDE report that will be released next Friday. China is making waves in the soy market and the country seems to want to make a move in South America.
The March wheat contract on the Matif closed €1 higher yesterday at €219,50 per tonne. On the CBoT, grains showed signs of recovery last trading session. Wheat was the biggest gainer, up 2,3% to $6.10 per bushel on the Chicago exchange. Corn closed 1% higher at $4.59¼ a bushel. Soy moved mainly sideways, eventually gaining 0,2% to close at $12.48½ per bushel.
The wheat market received support from a tender from the Egyptian state buyer GASC. Egypt has purchased 60.000 tons of wheat from Ukraine and 360.000 tons from Russia. Ukraine was the strongest bidder at $264,95 per tonne FOB (delivered to ship). The Russian bidders were all at $265 per tonne FOB. In the tender of December 28, GASC did not purchase because they thought the prices were too high. In the tender from two weeks ago, a large number of tenderers were also at $265 per tonne. The attempt to lower the grain price by canceling the tender at the end of December has therefore failed.
Competition from exporters from the Black Sea region remains an important theme on the European grain market. Yesterday, the European Commission released new export figures after a two-week Christmas recess. In the current season up to January 7, the EU has exported 15,84 million tonnes of wheat. That is 11% less than in the same period last year. 3,17 million tons of barley were exported this season, 3% more than last season. Corn imports remain at 9,03 million tons, 43% less compared to last season.
Smaller corn and soy stocks expected
The January edition of the WASDE report will be released next Friday. In the run-up to this, The Wall Street Journal yesterday published the results of a survey among analysts about what is expected in the USDA. No major changes are expected for wheat. The average global ending wheat stock in the survey is 258,3 million tonnes compared to 258,2 million tonnes in the December edition of the WASDE report. For the coming season, participants in the study expect that the area of wheat will be slightly smaller compared to last season in the US. A moderately bullish trend is expected for corn and soy. The average global ending stock of corn is estimated by the trade at 313,9 million tons and for soy 112,2 million tons. In the last WASDE report this was 315,2 and 114,2 million tonnes respectively.
Soy prices in the US have been under pressure in recent weeks, but this has not attracted any interest from China. Instead of shopping in the US, China is active in Brazil. According to some trade sources, China has bought three shiploads of soy from the South American country. Due to the large harvest last season and the start of the harvest this season, soy is widely available in Brazil, according to various sources. The state of the soy crop this season is not great. Brazilian consultancy Deral has lowered the soy rating in Parana province (the third largest soy producing state in Brazil) to 71% good or excellent from 86% last week.