Winter grain in the EU has a poor ranking

The March wheat contract on the Matif closed yesterday €0,75 higher at €217,50 per tonne. On the CBoT, wheat closed unchanged at $5.96½ per bushel. Corn showed a small plus, closing 0,2% higher at $4.46½ per bushel. More movement was in soy last trading session, which closed 1,3% higher at $12.39½ per bushel.

Too hot, too cold, too dry and too wet. It all appears on the map in the January edition of the Mars bulletin from the European Commission's scientific office. December was wet in the Netherlands, Germany, Poland and Austria, among others. Winter grain therefore has wet feet and there have been local floods. In the Mediterranean they could use rain. In Spain, Italy, Greece and North Africa, winter wheat is lagging behind due to a lack of moisture. The cold wave has caused damage in Scandinavia and the Baltic states, according to the JRC. It was also cold in Russia, but there was a thick layer of snow, making it easy to spend the winter. December was extremely mild in the Balkans, Hungary and Romania. The mild winter is favorable for the development of the late-sown winter wheat, but this is at the expense of winter hardiness. The risk of frost damage later this winter therefore increases, according to the JRC.

Less wheat is being sown in the US, according to the Farm Futures survey. The total wheat area, according to the survey, amounts to 48 million hectares. That's 1,6 million acres less than last season. According to the research, the area under winter wheat amounts to 37,26 million hectares. That is well above the 34,43 million acres that the USDA calculates in the January figures. The shrinkage is in spring wheat, which, according to Farm Futures, is being sown on more than 2 million hectares less. This would bring the acreage of spring wheat in the US to 9,06 million acres.

Soy attracts bargain hunters
According to analysts, bargain hunters hit the soy market. The price is fluctuating around a two-year low and that is arousing the interest of buyers. China sent a bearish signal, but it was ignored by the market. China wants to further reduce its pig herd. At the end of 2023 there were approximately 4% fewer pigs compared to the end of 2022. China wants to shrink further in the first months of this year to balance the pig market. China is a major buyer in the soy market and most of that soy goes to the pig sector. In addition, China wants to become less dependent on suppliers and wants to increase its own production. To this end, they are committed to expanding the cultivation of GMO soy, the Chinese Ministry of Agriculture wrote yesterday.

There was no sign of Chinese plans in the field of soy last year. Soy imports increased last year by 11% compared to 2022 to 99,41 million tons. This is close to the record year 2020. Some analysts therefore have reservations about Chinese ambitions to increase domestic soy production.