The European wheat market received support yesterday from a whole host of orders from North Africa and the Middle East. Ukraine already has its share of problems with free access to the Black Sea. The country's agriculture minister warns that the unrest in the Red Sea is creating an additional barrier to grain exports. In Brazil there is discussion about yield forecasts for soy. According to a grower association, the expectations of the USDA and Conab are not based on reality.
The March wheat contract on the Matif closed yesterday €2 at €216,50 per tonne. In Chicago, wheat was essentially flat, closing half a cent higher at $5.82½ a bushel. Corn lost 0,3% to $4.42¼ per bushel. Soy closed 1,8% lower at $12.05¾ per bushel.
Algeria's purchase of wheat continues to raise concerns on the grain market. Sources previously reported that the country had purchased between 500.000 and 650.000 tons of wheat from France and the Black Sea region. There is now talk of 900.000 tons. According to sources, the average price paid by Algeria would be approximately $265,50 C&F (free) per tonne. Not only Algeria is on the market. Egyptian state buyer Gasc has committed 360.000 tons of wheat. 60.000 tons of this comes from France at $262,50 FOB (delivered to port)/$284,50 per ton C&F. The remaining 300.000 tons comes from Russia at $265 per tonne FOB/approximately $285 per tonne C&F. The international orders don't stop there. Jordan reportedly bought 120.000 tons of wheat for $269 C&F and Tunisia bought 150.000 tons of soft wheat and 50.000 tons of durum. Prices of the orders from Tunisia have not been disclosed.
Ukrainian Agriculture Minister Mykola Solsky told Ukrainian national television today that the unrest in the Red Sea region is slowing down Ukrainian grain exports. "There are problems in the Red Sea and part of our exports went and goes via the Red Sea to China, Asia and African countries. The problems have significantly delayed these ships." It is mainly the attacks by the Houthi rebels on container ships and shipping companies that make the news. Last Monday, a bulk carrier was hit by a rebel missile. That ship was not loaded with grain but with iron.
Apart from reality
In Brazil there is discussion about the harvest forecast for soy. The USDA expects a harvest of 157 million tons and the authoritative Brazilian market agency Conab assumes a soy harvest of 155 million tons. According to the Brazilian association of soy growers Agrosoja Brasil, the estimates are much too high. The association, which represents thousands of growers, speaks of a harvest of 135 million tons. The predictions of the USDA and Conab are disconnected from reality according to Agrosoja Brasil. Prices for soy have fallen too far, partly due to optimistic forecasts, according to the trade association. "In addition to lower yields, farmers also have to deal with prices that do not reflect reality," Agrosoja writes.
Agrosoja receives approval from the Canadian EarthDaily Agro that soy yields can be a lot lower. Based on satellite data, this company writes that soy yields in the largest state of Mato Grosso will be the lowest in fifteen years. EarthDaily reports an average yield of 52,12 bags per hectare in Mato Grosso. That is more than ten bags per hectare less than last season.