Russia has been cautious this season in lowering the yield forecast for grains in the country. That is now starting to shift. There will be an emergency meeting with grain exporters about possible export restrictions. You don't do that when the stock positions are very large. Soy is climbing a bit despite favorable weather reports for South America. The trade is also taking a bit of a position, in the run-up to the Wasde report on Friday.
The December wheat contract on the Matif closed yesterday down €1 at €228,75 per tonne. On the CBoT, wheat moved a step higher, closing 0,7% higher at $5.99 per bushel. Corn was mostly sideways, eventually trading a quarter cent higher at $4.21 per bushel. Soybeans were also in the green, closing 0,4% higher at $10.20¼ per bushel.
It is Russia that is once again attracting attention in the wheat trade. The Russian ministry has called an emergency meeting with grain exporters. During the meeting, possible export restrictions will be discussed. If there are restrictions on the export of wheat, this will have a major impact on the world market, according to analysts. Russia is now the price fighter in the tenders, mainly from North Africa and the Middle East. Partly because of this, Russian exports are running smoothly.
Time is running out
After two years of very good harvests, the yield this season is lower according to preliminary estimates. In addition, it is very dry in the south of Russia. This causes problems with the sowing of winter wheat for the coming harvest. Approximately 13 million of the planned 20 million hectares of winter grain have been sown. However, time is running out for Russian farmers. If sowing is delayed much longer, the wheat will go into the winter insufficiently developed and there is a great chance of wintering out.
Russia has been very cautious in downgrading yield forecasts so far. It is not illogical that the Kremlin is now getting a bit nervous. It is certainly not said in so many words, but the fact that there is talk of export restrictions is, according to various experts, a sign of the times.
Favorable weather for South America
Soy is a South American party. After stable to slightly decreasing prices over the past week and a half, there was a cautious increase yesterday. According to the weather reports, the chance of rain in the dry areas of Argentina and Brazil is increasing. That water has to fall, players on the market now seem to think. Waiting for rain before sowing, as many Brazilian farmers have done, does not have to have a negative effect on the yield of soy. The problems only arise with the subsequent crop of corn. This has to be sown later due to a later soy harvest. The number of growing days and therefore the yield potential of the corn is reduced.
In the US, the trade is also taking a position in the run-up to the USDA Wasde report that will be released tomorrow evening Dutch time. For corn, experts are assuming a small downward adjustment for both harvest, consumption and final stock. A slightly higher consumption of corn in the US for the production of ethanol according to the new figures from the USDA did not really get the market moving. The ethanol stock is a bit lower than analysts assumed. At 22,15 million barrels, the US ethanol stock is the smallest in ten months. The market was counting on a stock of 23,29 million barrels. This smaller stock gives corn in the US some support.