Fundamentally, there are no major changes when it comes to wheat. The traders in Chicago didn't care about that. Wheat was booming there. For corn and soy, they are mainly looking at Argentina. Warm and dry weather is not favourable for the development of crops in Argentina.
The March wheat contract on the Matif closed yesterday €1,75 lower at €231,25 per tonne. In the US, wheat was the biggest gainer within the grain complex during the last trading session. The March contract on the CBoT rose by 2,1% to $5.40½ per bushel. Corn gained 1,6% to $4.57¾ per bushel. Soybeans also closed in the green, rising by 1,2% to $9.92½ per bushel.
After last Friday's dip, wheat in Chicago showed a strong recovery. The trade was partly supported by the weekly exports that the USDA published, which exceeded trade expectations by 15 million bushels. A lower dollar and upward momentum in other grains did the rest. Fundamentally, not much has changed in the wheat market, several analysts emphasize. A cold front is moving across the US, but due to the large amounts of snow that preceded it, there is little risk of wintering.
There is no snow in eastern Ukraine, southern Russia and western Kazakhstan. In fact, drier weather than normal is predicted for the next ten days. The status of winter grains in these countries remains a point of attention. In the period from September to December, Kazakhstan exported 3,7 million tonnes of grain, the country's Ministry of Agriculture announced. That is 54% more than in this period a year earlier. Exports to Uzbekistan, Tajikistan, Afghanistan and Kyrgyzstan have increased considerably, according to the Kazakh ministry. Exports to Iran have improved by a factor of 30, according to the ministry.
Dry summer in Argentina
In soy and corn, the weather forecasts for Argentina are the driving force behind the rally in the past trading session. The two major stock exchanges in Argentina (Buenos Aires and Rosario) report that crops have been damaged by the dry and especially warm weather in Argentina. After sufficient precipitation in the Argentine spring, the weather has now changed in the summer. The hot and dry summer in the southern hemisphere is starting to cause damage to Argentine corn and soy for the coming harvest, both stock exchanges write. According to the stock exchange of Rosario, an average of 35 millimeters fell in the provinces of Buenos Aires and the south of Santa Fe in December, compared to the historical average of 110 millimeters for this month.
Of the planned corn area in Argentina, 87% has been sown according to the Buenos Aires stock exchange. The expected corn area is 6,6 million hectares. The stock exchange expects 18,4 million hectares of soy to be sown this season, of which 93% is in the ground. The wheat harvest is almost over in Argentina. 95% of the harvest has been received according to the forecast of the Buenos Aires grain exchange.