The rally in the wheat market was short-lived. Last trading session, both in Paris and Chicago, it was a matter of consolidation. There are bullish signals in the market, but they do not really persist. Arguments about biofuel dampened the mood in corn. In Argentina, the weather is not entirely cooperative for corn and soy growers.
The March wheat contract on the Matif closed yesterday €0,75 lower at €203,75 per tonne. Wheat remains stable on the CBoT. The March contract gained ½ cent to $5.83¼ per bushel. Corn and soy declined somewhat. Corn fell 1,8% to $4.11 per bushel and soy fell 1,5% to $11.60¾ per bushel.
In the US, according to some analysts, China is creating a bottom in the wheat market. Late last year, Chinese buyers placed a number of large orders for US wheat. Exporters must go to the physical market to secure all wheat sold with sellers as delivery dates approach. In addition, the market may be anticipating US sanctions against Russia following the death of opposition leader Alexei Navalny. The US will present a sanctions package on Friday. Market players are cautiously anticipating that American wheat exporters could benefit from this.
In Europe, mediocre exports continue to hang over the market like a dark cloud. According to analysts, the relatively large stocks keep the lid on the wheat market and therefore Tuesday's increase did not continue, according to some analysts.
Biofuel
The use of ethanol produced from corn in biofuel remains a hot topic in the US. US Secretary of Agriculture Vilsack is committed to tax breaks for corn ethanol as a sustainable aviation fuel, he announced earlier this week. However, the Biden administration appears to be leaning toward a stricter climate model. Ethanol from corn would therefore find it more difficult to meet the conditions for qualifying for tax benefits for sustainable fuel.
The Argentinian grain exchange of Rosario has revised downwards the yield forecast for corn and soy. For soy, the harvest forecast has been reduced by 2,5 million tons to 49,5 million tons. That's just under the USDA forecast of 50 million tons. The expected corn harvest has been reduced by Rosario by 2 million tons to 57 million tons. That is 2 million tons higher than the USDA forecast. Showers are forecast in Argentina later this week. According to some local sources, this is desperately needed after warm, dry weeks.