The friendly tone for the wheat market in the Wasde report earlier this week continued yesterday. News from Russia also gave the market support. India is struggling with problems of a completely different order. There, the government is making frantic efforts to keep wheat affordable in times of record prices on the domestic market.
The March wheat contract on the Matif closed yesterday €1,75 higher at €230,75 per tonne. On the CBoT, wheat closed 0,3% higher at $5.43½ per bushel. Corn took a step back of 0,6% to $4.38 per bushel. Soybeans were virtually flat, closing ¾ cent higher at $9.95½ per bushel.
SovEcon expects Russia to export 3,4 million tons of wheat in December, down significantly from the 4,1 million tons exported in November. The higher export duty imposed by the Kremlin on December 1 is putting a brake on exports, according to SovEcon.
Russian farmers are less interested in wheat this season, according to analysts from Ikar. Growers are sowing up to 1 million hectares less wheat, Ikar expects. The reason is quite simple. Due to lower wheat prices, the margins of growers are under pressure and they are looking for better yielding crops. Oilseeds are more popular with Russian arable farmers. Ikar does not mention that, but the dry autumn undoubtedly plays a role. That caused problems with sowing and the development of the crop.
Record price
India is not troubled by relatively low wheat prices, but by the opposite. The government is concerned about how to keep wheat affordable as a staple food amid record prices on the domestic market. A new measure in this context is to reduce the wheat stocks that traders are allowed to hold. "As part of our efforts to control wheat prices, the central government has decided to revise the wheat stock limit, which will be effective up to March 31, 2025," the food ministry wrote.
Under the revised norms, wholesalers are allowed to hold a maximum of 1.000 tonnes of wheat, compared to 2.000 before the change. Retailers are allowed to hold a maximum of 5 tonnes per location, compared to 10 tonnes earlier. Processors/millers are allowed to hold a maximum of 50% of the maximum monthly processing capacity, instead of 60%. The stock position has to be reported to the ministry once a week. With the stock limits, which have been in effect since June 24 and were tightened on September 9, the Indian government is seeking to prevent hoarding and speculation in wheat.
In Ukraine, the harvest of grain maize is almost over. 96% of the sown area has been threshed, according to the Ukrainian Ministry of Agriculture. The yield is 8,5% lower compared to last season and amounts to 5 million tons up to December 24,6. The total grain harvest in Ukraine is according to the preliminary figures at 54,3 million tons. That was 57,1 million tons at this time last year.