Winter grains in Russia are doing well. Canadian farmers, contrary to analyst expectations, plan to sow slightly more wheat than last season. China canceled yet another wheat order from the US. You would think, together with the neutral tone of last Friday's Wasde report, sufficient for a moderate mood on the grain market. But as is often the case, the market reacted differently than expected.
The May wheat contract on the Matif closed yesterday €3,25 higher at €196,75 per tonne. On the CBoT, the May wheat contract rose 1,8% to $5.47¼ per bushel. Corn was up 0,5% at $4.41¾ per bushel. Soy lost 0,5% to close at $11.65 per bushel.
Wheat was cautiously on the rise and that is remarkable according to analysts. There was quite a bit of bearish news. The USDA confirmed yet another cancellation of a wheat order from China. 264.000 tons of US wheat purchased by China in December for April delivery has been crossed out. In a few days, China has now canceled more than 500.000 tons of wheat of the more than 800.000 tons of orders that were open.
Russian wheat prices continue to fall
Winter grains are doing well in Russia. Only 4% of the area is in poor or moderate condition according to the Russian Grain Union. On average, 6% of the area is at this time of year. Russia could export up to 2023 million tons of grain in the 24/70 season, according to Grain Union Chairman Arkady Zlochevsky. To achieve this, Russia must increase the quotas. The price for Russian wheat continues to fall. Ikar prices this week at $198 per tonne. That's $5 lower than last week.
Statistics Canada came up with the expected areas this season. Contrary to expectations, the wheat area in the forecast is slightly higher than last season. Stats Canada estimates a wheat area of 27 million acres (approximately 11 million hectares). That is 0,1% more than was sown in 2023. The biggest surprise, however, was rapeseed. The statistics office expects that the area of this crop will shrink by 3,1% compared to last season to 21,4 million acres (approximately 8,7 million hectares). The acreage of soy, oats and barley will shrink in the forecast. Canadian farmers are instead planting more corn, lentils and dry peas, according to Stats Canada.
Soy harvest lead is decreasing
In Brazil, the speed of the soy harvest is slowing down somewhat. According to AgRural, 55% of the area has been threshed compared to 53% last year this week. Due to drought at the beginning of the season, some of the soy was sown relatively late. These plots ripen later. It is therefore not illogical that the lead in the harvest compared to last season will turn into a deficit in the coming weeks.
Due to relatively low prices on the Brazilian market, trading is quiet, according to some sources. Despite the fact that liquidity is a bottleneck for farmers, very little corn is sold. Growers do want to sell soy during the harvest, but overall, growers seem to assume that grain prices will rise in the near future. Buyers are not sure about this and are holding back. The fact that there is little demand for corn is unusual for this time of year. This moderate demand is confirmed in Brazilian export figures. According to Secex data, Brazil exported 1,71 million tons of corn in February. That is 25% less than in February 2023.