The grain market has two faces. In the wheat market, tensions over the weather and the safety of grain ships on the Black Sea are creating a fairly steady mood. In corn and soy, somewhat subdued geopolitical tensions and good threshing weather in the US are putting some pressure on prices.
The December wheat contract on the Matif closed yesterday €1,25 higher at €229,75 per tonne. Wheat also closed higher on the CBoT, namely 0,4% higher at $5.94¾ per bushel. Corn lost some ground in the last trading session and closed 1,2% lower at $4.20¾ per bushel. Soybeans were the biggest loser with 1,7%. The November contract closed at $10.16¼ per bushel in Chicago.
Tensions in the Black Sea region are setting the tone for the wheat market. The possible consequences of the Russian missiles that hit two grain ships earlier this week are still lingering. Furthermore, the drought in the region is keeping people busy. Despite the fact that the conditions are certainly not favourable, Ukrainian farmers have made considerable progress with the sowing of winter grain. According to the Ukrainian Ministry of Agriculture, 2,88 million hectares of winter grain have been sown. That is 55% of the planned area. By far the largest crop is winter wheat, of which 2,62 million hectares of the planned 4,5 million hectares have been sown.
Backlog is increasing
In the EU, wheat exports are lagging behind last season. 6,35 million tonnes have now been exported compared to 8,9 million tonnes in the same period last season. The gap is widening somewhat. Last week, the EU exported 26% less compared to a year earlier and this week it is 29% less. Given the moderate wheat harvest in a large part of the EU, this is not really surprising.
Algeria has reportedly secured a tender for 360.000 to 390.000 tonnes of wheat. The wheat is milling wheat from the Black Sea region, according to sources, and the price is said to be around $262 per tonne C&F (freight forward). Jordan has a tender for 120.000 tonnes of wheat open, but has not made any purchases.
No golden week for corn
Corn and soybeans were under some pressure during the last trading session. According to analysts, this is partly due to developments on the oil market. Crude oil dropped somewhat because the situation in the Middle East is somewhat less tense. This makes corn for ethanol and soy for biodiesel less interesting. China, as a major buyer on the world market, is also keeping a low profile. A buying wave after the 'golden week' (in which the founding of the People's Republic of China is commemorated), which lasted from 1 to 7 October this year, has so far failed to materialise.
Favorable weather for threshing corn and soybeans in the American cornbelt is also putting some pressure on the market. American farmers are particularly busy with the soybean harvest. With 47% of the area harvested, that is the largest area of soybeans threshed around this time in seven years.
The EU is doing quite well on the soy market. Up to and including 6 October, 3,27 million tonnes of soy has been imported. That is 3,5% more than last season. For soybean meal, the lead is even bigger at 8%. In total, the EU has now imported 4,63 million tonnes of soybean meal.