Wheat was on the rise during the last trading session. Tensions in the Middle East are rising further with a missile attack by Iran on Israel. Rutte has started as secretary general of NATO and has given signals from which grain traders conclude that the conflict between Ukraine and Russia will not be resolved quickly. In addition, the weather is giving some extra support to wheat.
The December wheat contract on the Matif took a big step higher yesterday. Wheat gained €5,25 to €227,50 per tonne. Wheat also rose on the CBoT, closing 2,6% higher at $5.99 per bushel. Corn also had the wind in its sails, although the increase was more modest than wheat. The December corn contract on the CBoT closed 1% higher at $4.29 per bushel. Soybeans are a bit of a contrast to the grains. On the CBoT, soybeans closed a quarter cent higher at $10.57¼ per bushel.
Rising geopolitical tensions and setbacks in the Black Sea region have made players in the wheat market nervous in particular. Let's start with geopolitics. The Middle East is dominant there. Iran fired around 180 rockets at Israel yesterday. Israel has already stated that a direct attack by Iran cannot go unnoticed. According to analysts, the unrest in the region, including war in Gaza and Lebanon, could escalate further. This will not go unnoticed by the grain market, experts fear.
Our former Prime Minister Mark Rutte took over the gavel from Jens Stoltenberg yesterday and started as Secretary General of NATO. Rutte called Ukraine a top priority and said that the country belongs in NATO. "We have to make sure that Ukraine gets the upper hand in the battle," Rutte said in response to questions from journalists. In the grain trade, players seem to interpret that as a signal that the changing of the guard at NATO does not mean a faster end to the war in Ukraine.
Another Russian region in trouble
In Russia, the weather is not exactly cooperating with grain growers. In the West Siberian regions of Tomsk and Krasnoyarsk, a state of emergency was declared in recent weeks due to heavy rains. Yesterday, it was the governor of the Vozonez region, which borders Ukraine, who declared the state of emergency. Here, this is not due to problems with precipitation, but due to drought. In May, a state of emergency was also declared here due to frost. By declaring the state of emergency, farmers can claim their weather insurance and government support. In Voronez, around 2023 million tons of grain were harvested in 6, making the region the fifth largest grain producer in Russia. The price of Russian wheat is taking a step. Ikar increased the price of Russian Black Sea wheat by $5 to $222 per ton.
Export
In the EU, wheat exports are not yet booming. Up to and including 29 September, 6,14 million tonnes of wheat were exported, compared to 8,28 million tonnes last season. Ukraine also exported less wheat in September. According to the Ukrainian Ministry of Agriculture, 3 million tonnes were exported. That is 16% less than in August. The ministry also announced that Ukrainian farmers have sown 1,82 million hectares of winter grain. This means that 35% of the planned area has been sown. Of the sown area, approximately 1,7 million hectares is winter wheat.