The grain market continues to struggle. Egypt has secured 470.000 tons of wheat in a tender at competitive prices. Exporters seem to want to quickly empty the silos before the new harvest arrives. In the US, wheat is under pressure due to the supply peak around the harvest. The flooding in the northern Midwest is making little impact on the grain market so far.
The September contract for wheat on the Matif closed €1,25 lower yesterday at €221 per tonne. It was also a ballet of red numbers on the CBoT last trading session. Wheat closed 1,9% lower at $5.41¾ per bushel. Corn showed a similar movement and lost 1,8%. That brought the closing price of corn to $4.25½ per bushel. The decline in soy was somewhat more limited. Soy closed 1% lower at $11.63¼ per bushel.
The Egyptian state buyer Gasc secured 470.000 tons of wheat in a tender yesterday. Prices range from $227 to $230 per ton FOB (delivered to the ship). 180.000 tons of wheat come from Russia, 180.000 from Romania, 60.000 tons from Ukraine and 50.000 tons from Bulgaria. For the time being, Russian exporters do not seem to care much about the minimum export prices that the Kremlin is talking about. The cheapest tenderer was a Russian exporter with 60.000 tons for $227 per ton. They probably want to quickly empty the silos before the new harvest arrives.
Finally warm and dry weather
Europe is under the spell of warm and dry weather. A warmer dry period is more than welcome in our country, but also in France, Germany and the UK. In Eastern Europe and the Balkans, grain growers are less happy with this type of weather. According to weather reports, there is no weather change expected in Romania in the next two weeks. That is especially unfavorable for the corn there. Romania is the second largest maize producer in the EU.
In the US, growing weather is expected in the corn areas. The temperature may be above average, but rain is also forecast. The flooding in the northern Midwest is having little impact on the market. According to analysts, this is because it is difficult to determine how much damage there is to crops in the area. Some draw parallels with 1993 when late spring and early summer flooding wreaked havoc across the Midwest. A rally then largely failed to materialize. Only in September, when it became clear how much had really been drowned, did the market rise.
The extreme heat in the US appears to be limited to the southern prairies. The wheat harvest is in full swing there. By the end of last week, 40% of winter wheat had been harvested, according to the USDA. Analysts expect that about half will be threshed this week. Once the harvest in Kansas is over, the pace will slow down somewhat, some specialists expect. The supply peak around the harvest will therefore decrease.
speculators
According to some analysts, the pressure on the grain market is partly caused by speculators betting on a further fall in grain prices. It is still too early to say anything about yields for corn and soy, but there is something to be said for wheat in the US. There are large differences in yield between regions, but on average threshing is better than previously expected. An upward adjustment to the US wheat harvest in the July Wasde report is already more or less expected by some specialists.