Wheat was on the rise during the last trading session. Drought in the US and the Black Sea region provided food for the bulls in the market. The high export rate from Ukraine and Russia provided extra momentum. Soybean took a step back, partly due to reports from South America.
The December wheat contract on the Matif closed yesterday €2,75 higher at €219,75 per tonne. On the CBoT, wheat closed 2,1% higher at $5.70¾ per bushel. Corn also closed in the green, but the increase was smaller than wheat at 0,7%. Corn thus ended at $4.13¾ per bushel. Soybeans, in contrast to grains, took a step back. The November contract closed 0,9% lower at $9.65¼ per bushel.
The drought in the US is back on the radar of the grain trade. Winter wheat is off to a slow start, with only 38% of the area in the Crop Progress report rated good or excellent. That is the second worst winter wheat record since 1986 when the USDA began tracking the statistic.
Some rain is forecast for eastern Ukraine, southern Russia and western Kazakhstan, where it is dry. However, the predominantly dry weather pattern is not being broken, according to the weather services. The sowing of winter grains is proceeding somewhat slower than normal due to the drought. As in the US, there are also concerns here about the state of the wheat that has been sown.
Jordan has now secured wheat after several unsuccessful tenders. According to sources, the country has purchased 60.000 tons of wheat at $269 per ton C&F (freight forward) for delivery in early January. Jordan had a tender open for 120.000 tons.
Brake on exports?
The EU has exported 7,26 tonnes of wheat so far this season. That is 33% less compared to last season. Ukraine has exported 6,1 million tonnes of wheat this season up to and including September, according to UkrAgroConsult. If the provisional export figures for October are added to that, Ukraine would have already exported half of the wheat available for export in the first four months of the season. According to UkrAgroConsult, a remarkably large amount of wheat has been exported early in the season this season. This applies not only to Ukraine but also to Russia. This increases the chance of export restrictions by the countries on the Black Sea, according to the market agency.
Brazil soy growers are catching up
In Brazil, soybean growers have made a big catch-up with sowing. According to AgRural, 36% of the planned area has been sown. That was 18% last week. Last year at this time, 40% of the planned area of soybeans had been sown. According to AgRural, 52% of the first crop of corn has been sown. That is almost the same as the 53% last year this week. The first crop of corn accounts for about 20% of the Brazilian corn harvest. 75% of the corn harvest is a follow-up crop after soybeans.