The final stages are the hardest. This also seems to apply to the Russian grain harvest. Yesterday, a second region in Russian Siberia declared a state of emergency due to excessive rainfall. France expects to be able to export less wheat due to a small harvest. In addition, the quality of the French wheat is not optimal. In the US, there is surprise about the limited effect of the Fed's interest rate cut on the grain market.
The December wheat contract on the Matif closed yesterday €0,75 lower at €218,50 per tonne. In Chicago it was a less than exciting trading day for grains. Wheat closed unchanged at $5.75¾ per bushel. Corn rose by a quarter cent to $4.12¾ per bushel. There was more action in soybeans which closed 0,8% higher at $10.14 per bushel.
The moderate to poor grain harvest in the EU and sufficient supply from the Black Sea region balance each other out. Russia released harvest progress figures yesterday. According to Russian Deputy Minister of Agriculture Maxim Uvaidov, almost three quarters of the Russian grain harvest has been harvested. Uvaidov told the Russian news agency Interfax. According to the Deputy Minister, Russia has harvested 18 million tons of grain up to September 102. The total Russian grain harvest is estimated by the ministry at 132 million tons, of which 60 million tons are available for export.
State of emergency
The harvest of the last grain in Russia is not going completely without a hitch. A state of emergency was declared in the Siberian region of Krasnoyarsk today, the Russian news agency Tass reports. Heavy rains have caused considerable damage to crops, Sergei Ponomarenko, deputy governor of the region, tells Tass. "According to preliminary estimates, more than 17.000 hectares of crops have been damaged. The estimated extent of the damage is more than 280 million rubles (about €2,7 million ed.)." Earlier this month, a state of emergency was also declared in the neighboring region of Tomsk due to weather damage to crops.
France expects wheat exports this season to be 4 million tonnes. Last season, France exported 7,5 million tonnes of wheat. This lower export is due to the smaller harvest caused by the bad weather during the growing season. The quality of French wheat is also not great. Only 28% of the wheat has a hectolitre weight of 76 or higher. 41% of the wheat has a protein content of 11,5% or more, compared to 58% in the long-term average.
Interest rate reduction
The US central bank, the Fed, lowered interest rates by 50 basis points yesterday. This puts pressure on the dollar and is therefore favourable for US exports. Some analysts find it disappointing that the grain market has responded very little to this. Grains from the US are already relatively competitively priced on the world market and with the fall in the dollar as a result of the Fed's interest rate decision, there should be room for grains to rise, some analysts argue.