On the Paris stock exchange, wheat rose to its highest point since last June. The weak euro is giving wheat exports a boost, according to analysts. In the US, wheat was hit by an expensive dollar. For corn and soy, the effect of the relatively high dollar was offset by higher energy prices.
The March wheat contract on the Matif closed yesterday €2 higher, reaching €239,25 per tonne. That is the highest closing price since early June. On the CBoT, wheat took a step back, closing 1% lower at $5.45¾ per bushel. Corn and soybeans moved more sideways, but still closed in the green. Corn gained 0,2% higher at $4.59½ per bushel. Soybeans closed 0,1% higher at $9.99½ per bushel.
According to analysts, wheat on the Matif was on the rise due to the weak euro, which has fallen back to below $1,04. This makes European wheat more interesting for international buyers. In the US, the exact opposite is happening. American wheat exporters are suffering from a high dollar exchange rate. The weather reports are also helping European wheat. The wheat in the Black Sea region was already not doing well and with limited rain in mild winter weather, little change is expected. Wheat from that region is the direct competitor of the EU.
Colder weather is on the way for the prairies in the US. However, the consequences for the winter grains remain limited because the cold front is preceded by snow. Snow is not only welcome on the prairies as protection against the cold. It is on the dry side, so if the snow melts later in the winter, the wheat will benefit from it again. The latest drought monitor shows that a quarter of the winter wheat in the US is dealing with drought. Last year this week that was 32%.
Support from energy sector
Soy and corn are less affected on the Chicago stock exchange by the relatively expensive dollar. According to analysts, this is due to rising energy prices. This makes ethanol from corn and soy oil more interesting for use in biofuel. In addition, the drought in Argentina is also food for the bulls in the market. No significant rain is expected in the South American country for the next two weeks.
The extreme south of Brazil is also struggling with drought. In the vast majority of Brazil, the growing season has been going according to plan so far. StoneX has therefore significantly increased the yield forecast for soy in Brazil to 171,4 million. In the previous forecast, StoneX still assumed 166,2 million tons. The export forecast has been increased from 103 to 107 million tons. The forecast for the Brazilian corn harvest has been increased by 300.000 tons to 128,6 million tons by StoneX.