The consequence of a weather market, in which international grain quotations now find themselves, is that it has ups and downs. This is evident again in the wheat market. Slightly more positive (read: less negative) figures for the harvest in Russia and Canada, among others, have a direct impact on price formation. Drought still causes concerns about the European corn harvest.
After five days of price increases in a row, the price for wheat on the Matif fell again on Tuesday, July 23. The contract for September delivery fell to €225 per tonne. That is a decrease of €0,75 compared to Monday's closing price. This price level was last reached on July 9. The price is also in the red on Wednesday, July 24. Wheat traded lower on the CBoT in Chicago. There the price level fell by almost $2 per tonne.
Harvest figures below last year
Market agency Agricensus writes that the wheat harvest in Russia was 38% completed at the end of last week. Also, 16% of the barley had been harvested. The yield of wheat is 8% below the 2023 level. For barley it is 13% less. Rapeseed has been harvested at 13%. Yields are also 13% lower. Official figures from the Russian Agriculture Ministry indicate that 50 million tons of grain have been harvested, of which 43 million tons of wheat.
SovEcon, the leading market agency from the Black Sea region, increased its Russian yield forecast to 84,2 million tons (+100.000 tons). Exports are also estimated to be higher. For grain maize, a small decline in yield is visible due to the persistent heat and drought. This also plays a role further to the west of Europe. The corn price on the Matif is therefore still holding steady at €222,50 per tonne. For the new harvest, €219,50 is slightly higher than earlier this week.
Canada's agriculture ministry has increased its wheat production figure by 500.000 tonnes to 35,4 million tonnes of wheat. Last year, 32 million tons were harvested. The forecast for barley was reduced by 1 million tonnes, and that for rapeseed was increased by half a million tonnes, to 18,6 million tonnes.
Uncertainty about corn and soy production
In the US, sentiment on the commodity market is cautiously turning around. Analysts and buyers were betting that good yields in the eastern US could level out a slightly lower yield in the west. Now they are no longer so sure. That puts a damper on the market. It should be noted that, if the weather holds, the country could harvest a bumper crop of corn and soy. The USDA estimates corn crops to be 1% less good to excellent compared to a week ago. The rating for soy remained unchanged.
This cautiously positive sentiment for soy and corn, which results in stable to slightly rising prices, ignores wheat. The balance on the world market plays a determining role there and the American market lacks support for further increases.
Consequences of Trump
The news that President Joe Biden is no longer in the running for a new run in the White House has caused headaches for the soy market. If Donald Trump returns to power on November 5, they fear that trade with China will again come under severe pressure. After the market had absorbed this news, the price was able to recover cautiously. The funds' relatively large short positions in soy make the price sensitive to short-term price increases.