Wheat was on the rise on the Paris stock exchange during the last trading session. This while wheat in the EU is doing relatively well according to the latest Mars bulletin. There are more concerns about winter grains in Ukraine and Russia. Due to a dry autumn, the situation is moderate and the winter wheat has not yet hardened off. A dream start is an exaggeration, but it has been less so with soy in Brazil. It is still early in the growing season, but a record harvest could be on the way according to Cepea.
The March wheat contract on the Matif closed yesterday €4 higher at €233,50 per tonne. On the CBoT, wheat lost some ground, closing 0,4% lower at $5.50 per bushel. Soybeans fell even more than wheat, losing 0,6% to close at $9.82 per bushel. Corn closed 0,7% higher at $4.45 per bushel.
On the Paris stock exchange, wheat is on the rise and in a way that is remarkable. The starting position for winter wheat in the EU is not all that bad. At least that is what the JRC - the scientific bureau of the European Commission - states in the December edition of the Mars bulletin. In most of the EU last month was mild in terms of temperature and the rain was not too bad after a rather wet start to the new growing season earlier this autumn. This has given farmers the opportunity to sow the last pieces of winter grain. And what has been sown is generally also relatively well developed.
Wintering out
Around the Black Sea, the JRC is concerned about the state of winter grains. "The sowing and early growth of winter wheat was severely hampered by a very dry cultivation layer. This slowed down growth and resulted in a very moderate state of winter crops," according to Mars. Due to this moderate start, winter wheat is not yet sufficiently winter-hardy in eastern Ukraine and southern Russia. In central Europe, wheat has not yet hardened off, but the crop there is more vital, making it more resistant to a blow, according to the JRC. A colder period at the end of November did little damage in Central Europe, according to the JRC, partly due to the combination with snow. In southern Russia and eastern Turkey, there is light to moderate damage in late-sown winter grains.
Russian wheat prices are on the rise. Ikar raised the quotation for Black Sea wheat by $6 to $234 per tonne. This gives European and American exporters some confidence. Russian grain stocks as of December 1 were 21% smaller than a year earlier. According to the Russian statistical agency Rosstat, there were 1 million tonnes of grain including pulses and corn in Russian storages on December 31,1. A year earlier, this was 39,4 million tonnes. The largest decrease was in wheat, where stocks are 25% lower, namely 18,7 million tonnes compared to 24,8 million tonnes.
Saudi Arabia has bought 804.000 tons of wheat in a tender for $262,50 to $269,89 C&F (carriage paid). Exporters from almost all over the world participated in the tender. The EU, the Black Sea region, North and South America and Australia were represented. Saudi Arabia had planned to secure 595.000 tons of wheat but ended up buying more than 200.000 tons extra. Romania, Bulgaria and some South American countries are allowed to supply the bulk, according to sources. One or two shipments are also said to come from Russia.
Good harvest forecast puts pressure on price
Despite a good demand for soybean oil, the Brazilian research institute Cepea is not very optimistic about the soybean price in the coming season. Cepea predicts a healthy demand for soybean oil, especially for the production of biodiesel in Brazil and the US. Due to a reasonably favourable growing season in South America, a record harvest is expected in Brazil, for example. A good harvest is usually not very conducive to prices. For corn, the institute expects the market to stabilise and may even increase in the coming weeks due to a limited supply. This is mainly due to the fact that it will take some time before the new harvest comes onto the market.