The last trading day of 2024 ended in the green on the grain market. Drought in Argentina and a moderate winter grain situation in Russia supported the market. According to analysts, damage from a cold front in the US is limited because it is accompanied by snow.
The March wheat contract on the Matif closed €3 higher at €237,25 per tonne in the last trading session. Prices on the CBoT also closed in the green. Wheat closed 0,6% higher at $5.51½ per bushel. Corn gained 1,4% to $4.58½ per bushel. The biggest gainer was soybeans, which closed 1,7% higher at $9.98¼ per bushel.
In addition to the weather reports for Russia - some precipitation but mostly too mild for the time of year - and Argentina - dry - there is now also more attention for the weather in the US. On the prairies, temperatures have dropped well below freezing. The onset of the winter cold is accompanied by snow. According to local sources, the chance of frost damage in the winter wheat is therefore limited. The snow provides a protective blanket.
Relatively large wheat harvests in Australia and Argentina (where the harvest is now underway) are putting some pressure on the wheat market. In another agricultural powerhouse in the southern hemisphere, Brazil, farmers are less interested in wheat. That is according to the Brazilian market bureau Cepea. The area of winter wheat has fallen by 12% to 3 million hectares. Due to lower wheat prices and moderate yields per hectare, Brazilian arable farmers have sown less wheat. Nevertheless, the harvest for the 2024 growing season is not much smaller compared to a year earlier. The average yield in Brazil is estimated at 2,6 tonnes per hectare. That is 13% more than a season earlier. The total Brazilian wheat harvest is estimated at 8,1 million tonnes and is therefore 0,4% lower than in 2023.
Genetic modification in China
China is increasing its focus on genetic modification to increase crop yields and better ensure food security. Last Tuesday, the Chinese Ministry of Agriculture announced 5 gene-edited and 12 genetically modified varieties of soybeans, corn, rice and cotton. At gene-editing (CRISPER-Cas) genes present in the plant family are used, as opposed to genetic modification, in which genes from outside the plant family are used. Two soy varieties and one variety of wheat, maize and rice respectively, which were modified using gene-editing have been developed are now approved in China. Many of the genetically modified crops in China, such as corn and soy, are used in animal feed. As in Europe, Chinese consumers are concerned about the safety of the modified crops.