The French Ministry of Agriculture has revised down the yield figures for wheat. The French soft wheat harvest is the smallest since 1986. With the yield figures from the EU in mind, it is not entirely illogical that wheat exports continue to lag behind last season. Export data from the US caused more commotion. Soy from the US is very competitive on the world market. So much so that Argentina is importing soy from the US for the first time since 2019.
The December wheat contract on the Matif closed yesterday €1,25 lower at €219,25 per tonne. On the CBoT, wheat also took a small step back. Wheat lost 0,5% to close at $5.75¾ per bushel. Corn gained 0,4% to $4.12½ per bushel. Soybeans saw only minor movements during the last trading session. The December contract closed 0,1% higher at $10.06 per bushel.
The EU's wheat export deficit is not really being closed yet. Up to 15 September, 5,39 million tonnes of wheat were exported, compared to 6,99 million tonnes in the same period last season. The deficit on last season remains stable (at 23%) compared to last week. Incidentally, the EU also has less to export due to disappointing yields. Yesterday, the French Ministry of Agriculture lowered the yield estimate for soft wheat from 26,32 million tonnes to 25,78 million tonnes. This makes the soft wheat harvest the smallest since 1986.
Russia thirsts for a little more wheat
After a series of cuts for the Russian harvest, SovEcon yesterday revised its forecast slightly upwards. The agency now expects a yield of 82,9 million tons. In its previous forecast, SovEcon assumed 82,5 million tons. The USDA is slightly higher than SovEcon with the expected Russian grain harvest at 83 million tons.
In the first six months of 2024, wheat prices were largely (substantially) lower than in the first half of 2023. Nevertheless, Egypt imported significantly more wheat this year, calculated by import value. In the first half of 2024, the country on the Nile imported $2,1 billion worth of wheat, compared to $1,7 billion in the same period a year earlier.
Argentina buys wheat from the US
The USDA export figures include a notable transaction. For the first time since 2019, Argentina has purchased soy from the US. The volume of 88.400 tonnes may not be spectacular, but it comes as a complete surprise to many analysts and is a sign that soy is dirt cheap in the US. It is not unusual for Argentina to buy extra soy. According to some sources, soy can be loaded onto the ship delivered to the port of New Orleans for delivery in October for around $395 tonnes. This makes soy from the US roughly $16 per ton cheaper than Argentine soy.
Over the past twenty years, soy processing capacity has expanded faster than the growth of cultivation in Argentina. High taxes and large fluctuations in exchange rates have had an impact on the agricultural sector in Argentina. In order to keep the factories from coming to a standstill, Argentine processors buy soy, mainly from neighbouring countries Brazil and Paraguay. Due to low water levels in rivers, the volume of soy that can be transported via these waterways is limited.