Analysis Grains & Commodities
Rain comes at the wrong time in Australia
Ukraine is on a roll with wheat exports. Up to and including November, the country has exported 55% more wheat compared to last season. In Australia, the wheat is doing well and Abares expects a harvest that is well above the ten-year average. That wheat is still outside and the weather is not cooperating to get the crop in under good conditions.
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Choose the subscription that suits youThe December wheat contract on the Matif closed yesterday €1,25 higher at €213,50 per tonne. On the CBoT, wheat also showed a cautious plus, closing 0,2% higher at $5.38 per bushel. Corn closed 0,3% lower at $4.22 per bushel. Soybeans showed a slightly sharper decline, losing 0,8% to close at $9.83¾ per bushel.
Ukraine exported 8,96 million tons of wheat from July to November, UkrAgroConsult writes based on preliminary figures. This means that Ukraine has exported 55% more wheat so far this season compared to the same period last year. "The share of destinations in Asia has increased significantly due to the stable sea corridor", the agency writes in the explanation of the figures. Indonesia, Vietnam and Thailand are among the top 5 major buyers. Spain remains the largest buyer of wheat for Ukraine. "Due to the expansion of the Russian and even Ukrainian wheat flows, wheat exporters in the EU are focusing more on the West African market. France and Germany have partly adapted to the growing competition in Algeria by selling more to Morocco and Nigeria", UkrAgroConsult notes.
Rain during Australian harvest
Due to smooth exports in the first months of the season for both Ukraine and Russia, it is expected that less wheat will be available for export in the second half. As a result, analysts' attention is shifting somewhat more to what is happening in the southern hemisphere. Earlier this week, Abares set the yield forecast for wheat in Australia at 31,9 million tonnes. The wheat still has to be harvested properly. The weather is not cooperating completely. Rain has fallen in south-eastern Australia and according to the weather models, more precipitation is expected in the coming week. Rain in a ripe crop does not benefit the quality. Some analysts warn that this may mean that more wheat will have to be sold as feed wheat.
The Black Sea region and the Middle East have been in turmoil for a long time. And if that wasn't enough, things are also in turmoil in South Korea. President Yoon staged a covert coup that failed. Now, most of us won't immediately make a connection between South Korea and the grain market, but there is. The country is a major importer of agricultural raw materials on the world market. South Korea is a major buyer of corn in particular. According to some analysts, the political unrest is not doing much good to confidence in the market. Coincidence or not, the USDA announced yesterday that 30.000 tons of soybean oil from the US is going to South Korea. Incidentally, that didn't give the soybean market much support.