Wheat yield figures from Germany and Canada and wheat quality in France could not be ignored. Wheat was on the rise in both Paris and Chicago. Corn and soy were slightly weaker last trading session. News from China could play a role in that.
The September wheat contract on the Matif closed yesterday €4,75 higher at €198,50 per tonne. On the CBoT, wheat gained 1,2% to $5.14¼ per bushel. Corn and soybeans took a step back in the last trading session. Corn closed 0,5% lower at $3.65¼ per bushel. Soybeans lost 0,9% to $9.58½ per bushel.
Moderate yield figures from the EU now seem to have some effect on the wheat market. The German Ministry of Agriculture estimates the wheat harvest for 2024 at 18,8 million tonnes. That is 12,7% less than in 2023. The cause of the smaller harvest are the moderate conditions during the growing season, which was mainly characterised by wet periods.
FranceAgriMer released the results on the quality of the wheat. Both hectoliter weight and protein are disappointing. 26% of the French wheat has a hectoliter weight of 76 kg/hl or higher. The five-year average is 76% at or above 76 kg/hl. 74% of the wheat has a protein content of 11% or more compared to 85% in the five-year average. Only 43% is above 11,5%. The moderate quality of the wheat is on top of the disappointing yields. According to the latest estimates, the French harvest would be the smallest since the 80s.
Canadian wheat harvest smaller than expected
Statistics Canada released a yield estimate for wheat in the country yesterday. The total wheat harvest is estimated at 34,4 million tonnes. That is above last year's harvest when 32 million tonnes of wheat were threshed. However, analysts had expected a harvest of 35,1 million tonnes. Spring wheat is good for 25,4 million tonnes this season compared to a harvest of 24,8 million last season. However, the market expected a spring wheat harvest of 26,6 million tonnes.
Russia has raised the export tax on wheat by almost 10% from 828,40 rubles to 908,50 rubles per tonne (around €8,14 to €8,93). Russia imposed the tax in 2021 to dampen price fluctuations on the grain market. The money raised from the export tax will be used to provide subsidies to agricultural producers in Russia.
Protectionism
China has asked domestic traders to buy less grain from abroad. This is reported by Bloomberg news agency based on Chinese sources. According to Beijing, there is more than enough grain available in China and demand is lower than previously expected. Due to sufficient supply and lagging demand, prices are under pressure. This is seen by the People's Republic as a threat to local farmers.
The Chinese economy is growing less than the government would like and the increase in the living standard of the average Chinese shows signs of leveling off. China has drawn up a kind of framework with guidelines for the import of raw materials. By actively steering the purchases, Beijing hopes to dampen the consequences of fluctuations on the world market for local processors and consumers.