The news that dominates the grain market is the Wasde report. For corn, the USDA takes a reasonable position in the December edition of the report. There is also an undertone to wheat in the Wasde report, but for soybeans the report is neutral. News from China was more bearish in tone, but that did not really get a grip on the market.
On the Matif, the December wheat contract closed at €218,75 per tonne. The March contract closed €1,75 higher at €229 per tonne. On the CBoT, the December wheat contract rose 0,1% to $5.42 per bushel. Corn was stronger, rising 1,5% to $4.40½ per bushel. Soybeans were also stronger, closing 0,5% higher at $9.94¾ per bushel.
The USDA released the Wasde report for December last night Dutch time. For corn the report is downright bullish. The US ending stock of corn has been reduced by 200 million bushels to 1.738 million bushels. That is considerably more than the 165 million bushel reduction that the trade had expected. The US is exporting 150 million tons more corn than was forecast in the November edition of the Wasde report. Most notably, the use of corn for ethanol has increased by 50 million bushels. The USDA is not making any major adjustments to the crop estimate for South America, but it is also increasing the share of corn that goes into ethanol. The world ending stock of corn is now estimated at 296,4 million tons. That is considerably less than the 303,6 million tons that the trade had expected in the Reuters poll.
Wheat market remains tight
The USDA is giving a moderate support signal for wheat. For the EU, the USDA is reducing the harvest by 1,3 million tonnes to 121,3 million. Harvest figures from various member states are lower than previously expected, the USDA writes. The wheat yield in Brazil is also lower, according to the harvest data. The EU and Russia will export less wheat, but this will be partly compensated by higher exports from the US and Ukraine. The USDA explicitly mentions the export quotas. The volume traded on the world market has been reduced by 1 million tonnes to 2123,7 million tonnes. The total volume (opening stock plus production) available this season has been increased by 600.000 tonnes to 1.060,4 million tonnes. This is due to an adjustment in the opening stock. The closing stock of wheat is estimated to be 300.000 tonnes higher at 257,9 million tonnes. This is the smallest stock since 2015/16, the USDA writes.
For corn and wheat, the USDA is sounding a signal, but for soybeans the tone is fairly neutral. Production for Argentina has increased by 1 million tons, but for Brazil the harvest has remained the same. And unlike corn, the use of soybean oil in biofuels has remained unchanged. The world end stock of soybeans has decreased slightly to 131,9 million tons from 132,3 million tons in the November edition of the Wasde report.
Concerns about trade
It gets a bit snowed under by the Wasde report, but of course more happened in the grain trade. The EU exported 8 million tons of wheat up to and including December 10,24. Last year that was 14,41 million tons. China imported 7,15 million tons of soy in November, according to Chinese customs figures. That is the smallest export for this month since 2018. According to analysts, the lower soy imports are a sign that Chinese processors are worried about trade relations. Soy was hit hard during the first Trump administration and processors fear a repeat of that scenario.