Drought in US winter wheat is rapidly easing

The December wheat contract on the Matif closed yesterday €2 lower at €214,25 per tonne. On the CBoT, wheat also took a step back, closing 0,3% lower at $5.37¾ per bushel. Corn lost 1% to $4.15¾ per bushel. Soybeans, in contrast to grains, were on the rise, closing 0,5% higher at $9.88¾ per bushel.

In America, they celebrate Thanksgiving today. The drought monitor is therefore a day earlier than we are used to. Problems with drought in winter wheat have not yet been completely solved, but the sting has been removed. 28% of the winter wheat in the US is in a drought region. Last week that was 40% and four weeks ago 62% was dealing with drought.

Yesterday, Algeria and Tunisia secured wheat in tenders. Algeria bought 150.000 tons of breadmaking wheat at $267 per ton C&F (freight forward). Tunisia secured 100 tons of soft wheat and 100 of durum wheat at $259 and $348 per ton C&F respectively. All the wheat in the tenders is reported to come from the Black Sea region.

The nervousness about the war between Russia and Ukraine is decreasing somewhat on the grain market. The fighting continues unabated but the grain exports of both countries do not seem to suffer much from it. Rain is predicted for the south of Russia and that also contributes to price pressure on the wheat market. According to the weather models, the rain will pass the growers in the southernmost part of Russia by.

Cotton is gaining popularity in Brazil
Brazil is a major player in the global soybean market. However, the biggest growth in soybean acreage seems to have stopped, Reuters notes. Demand for soy from China has more or less stabilized and seems to have peaked. China accounts for around 70% of Brazilian soy and was the main driver for the expansion of the soybean acreage in Brazil. Cotton could well become the new cash cow for Brazilian farmers. "Given the expected profit margins, cotton will yield better than soy, and much more than the next crop corn," Reuters quotes Brazilian market bureau Veeries.

Trump’s plans for an import duty on products from Canada and Mexico would make potash a lot more expensive. About 90% of the potash used in the US comes from Canada, and a 25% duty would make potash the equivalent of €69 per ton more expensive. There are no alternative suppliers. The US imports 10% of its potash from Russia. Belarus, the other major player in the potash market besides Canada, is not allowed to supply fertilizer to the US due to sanctions.