A rally in the wheat market came as a surprise to many analysts. There is no immediate news that explains the increase. In any case, the European export figures did not come as a surprise. Grain trade between Ukraine and Poland remains a point of contention. The Polish ministry will release later this week a list of companies that have benefited from the import. In Brazil, large stocks are dampening the grain market.
The March wheat contract on the Matif closed yesterday €4,25 higher at €204,50 per tonne. Traders in the US started working in good spirits after the long weekend. Wheat closed 4% higher yesterday at $5.82¾ per bushel. Corn and soy moved more sideways but remained in the green. Corn added 0,5% to $4.18¾ per bushel. Soy showed a fractionally larger increase of 0,6% to $11.79 per bushel.
The revival in wheat comes as a surprise. According to several analysts, there is no fresh news that can directly explain a rally. We may now be at a level where supply is drying up, according to some analysts.
The EU exported 13 million tonnes of wheat until February 19,90, according to figures published yesterday by the European Commission. This time last year, 20,79 million tons of wheat had been exported. Ukraine has increased the pace of exports. In the first 15 days of February, 3,1 million tons of grain were exported compared to 2,2 million tons in the first 15 days of January. Russia has fulfilled its promise of free grain for six African countries. The Kremlin reports that 50.000 tons of grain went to Somalia and the Central African Republic and 25.000 tons to Mali, Burkina Faso, Zimbabwe and Eritrea. Putin promised free grain at a summit with African leaders last July. Shortly afterwards, Russia withdrew from the Black Sea grain deal.
Trade dispute
Poland fears that Ukraine may file a new case against the country at the Word Trade Organization (WTO). Polish State Secretary for Agriculture Michal Kolodziejczak said this in an interview on Polish television. The Polish government is seeking support from the European Commission to curb the import of agricultural goods from Ukraine. At the end of this week, the Polish government wants to publish a list of companies that import grain from Ukraine and thus disrupt the market. Although not all imports are illegal, some fear that it will become a kind of 'shame list' for companies that claim, among other things, to offer Polish products. The Ministry of Agriculture wants to consult with the Polish competition authority UOKiK before publication.
Almost a third harvested
Brazil continues to dominate the soy news. According to AgRural, the soy harvest is 32% completed compared to 23% last week and 25% this week last year. Safras & Mercado also provided harvest progress figures. Safras reports that 29,4% of Brazil's soybean area has been threshed. Last week it was 21,6% and last year this week it was 20,9%.
The stocks in Brazil are relatively large. At least that is what Airton Galinari, director of Coamo, Brazil's largest cooperative, says. At the start of 2024, the stock was more than 50% larger than a year earlier. Coamo has 3,66 million tons of soy, corn and wheat left over from last season. That is approximately 36% of the total volume of the 10 million tons of grain and oilseed that the cooperative collected last year. The larger stock is partly due to last season's top harvest and partly due to farmers' reluctance to sell in a declining market. The relatively large amount of grain hanging above the market does not improve the mood among farmers and may put pressure on prices on the domestic market.