Rain or the lack thereof remains a theme on the grain market. In France, precipitation continues to play tricks on growers. If not during the harvest of grain maize, then during the sowing of winter grain. In South America, farmers could use rain after a very dry and warm period. Russia announced measures last Friday to limit grain exports. The latest figures do not yet reflect this.
The December wheat contract on the Matif closed yesterday €0,25 lower at €228,75 per tonne. On the CBoT, wheat fell more sharply, closing 2,1% lower at $5.86½ per bushel. Corn also closed in the red, losing 1,9% to close at $4.07¾ per bushel. Soybeans closed 0,9% lower at $9.96 per bushel.
The wet weather is not over yet this season. In France, only 7% of the area of grain maize had been harvested by 6 October, according to figures from FranceAgriMer. Last year around this time, half of the maize had been threshed. The maize harvest in France has not started so slowly since 2013. It is not only the harvest that is suffering from the wet conditions. The sowing of winter barley and wheat is lagging behind the five-year average, according to FranceAgriMer.
Export tax
In Russia, there are concerns about whether there is enough wheat. Last Friday, the Kremlin met with Russian grain exporters to limit grain exports. The most important results are that the Russian ministry is increasing the export tax on wheat by 42% to 1.872 rubles per tonne. Converted, that is €17,80 per tonne. In addition, the ministry is setting a minimum bid price on tenders of $250 per tonne delivered on the ship and wants direct business with buyers without third parties.
Russian attempts to slow down grain exports are not yet reflected in the figures. SovEcon writes that Russia exported 1,1 million tons of grain last week, of which 1 million tons was wheat. A week earlier, Russia exported 870.000 tons of grain, of which 800.000 tons was wheat. The quotation for Russian wheat from Ikar rose by $7 to $230 per ton FOB. The price is therefore on the rise, but is not yet at the level desired by the ministry for the international tenders of $250 per ton.
Drought in South America
In Argentina, rain has brought some relief. In the agricultural regions in the north of the country, scattered showers have fallen, writes the Rosario stock exchange. Corn and wheat in particular have been able to benefit from this.
In Brazil, sowing soy is not going well yet. Warm and dry weather is putting a brake on the work. According to market bureau AgRural, 8,2% of the planned soy area in Brazil has been sown. Last week that was 4,5% and last year 17% of the soy was sown. Little progress is being made, especially in Mato Grosso. Farmers are waiting for more consistent rain and that is not really in the weather forecast yet. Brazilian growers have made more progress with the sowing of the first crop of corn. According to AgRural, 42% of the planned area is in the ground.