Analysis Grains & Commodities
If the weather cooperates, wheat prices will take a step back
The weather is finally on our side for wheat growers in the northern hemisphere. In Europe, farmers are getting the chance to sow the last winter wheat, and in the US and Russia, the rain they are desperate for is falling. Russia should be almost finished with the harvest. That is the conclusion you can draw if we compare the statements of the prime minister with those of the minister of agriculture. The greatest unrest on the Chicago stock exchange is in soy. It closed more than 2% higher yesterday.
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Choose the subscription that suits youThe December wheat contract on the Matif closed €1,25 lower at €215,25 per tonne in the last trading session. Wheat also took a step back on the CBoT, closing 0,3% lower at $5.71½ per bushel. Corn, on the other hand, took a step up to $4.27½ per bushel. Soybeans stood out on the Chicago exchange, closing 2,1% higher at $10.15½ per bushel.
No crazy outliers in exports and reasonably favourable weather put the wheat market under some pressure during the last trading session. In Europe it will remain dry in the coming days and the last winter wheat can be sown. The dry weather is also favourable for the harvest of the last crops such as beets and corn. On the eastern side of the Black Sea, where it was dry, some rain fell and more is coming this weekend. In the US, rain fell on the southern prairies and we can see that in this week's drought monitor. 57% of the winter wheat is now in a drought area compared to 62% last week.
Russia has so far harvested 128 million tons of grain and oilseeds, Russian Prime Minister Mikhail Mishustin told the Russian news agency Interfax yesterday. According to Mishustin, oilseeds such as soy, sunflowers and rapeseed have done well. The prime minister did not say how far the harvest has progressed. Earlier this week, the Russian Minister of Agriculture said that he expects a total harvest of 130 million tons. That is considerably less than the 150 million tons in previous Russian forecasts.
China is pulling on soy
Soybean was the most volatile market in the recent trading session, and that has everything to do with the US elections. Some analysts are hinting that China could speed up the export of soybeans from the US before Trump is in office. According to calculations by Reuters, China imported 8,09 million tonnes of soybeans in October. Last October, that was 5,18 million tonnes. In total this calendar year, China has imported 89,94 million tonnes of soybeans. That is 11% less than last season. The record import of 100,31 million tonnes is therefore within reach this season. The US agricultural attaché in Beijing expects China to import a total of 104 million tonnes of soybeans. The expected soybean harvest for China has also been increased slightly by the attaché to 19,9 million tonnes. Partly due to a larger acreage and partly due to relatively favourable weather during the growing season.
Tonight Dutch time the USDA will publish the November edition of the Wasde report. Analysts and traders do not expect major shifts in the estimated yield of corn in the US compared to the previous report, according to the Reuters poll. The yield of soybeans is slightly lower in the poll. Looking at the world end stocks of wheat and corn, participants in a Reuters poll expect a slight bullish report. Ending wheat stocks are expected to be down 1 million tons in the new report, compared to 257,7 million in the October Wasde report. Traders expect the USDA to also cut corn stocks by 1 million tons. Soybeans will remain virtually unchanged, according to poll participants.