Friday's Wasde report had an effect on the grain market last trading session. Tighter supplies of soy and corn are making the market a bit nervous. Add to that a record import from China and the rally is easy to explain. Not all analysts are equally sure that the increase will continue.
The March wheat contract on the Matif closed yesterday €1 higher at €234 per tonne. On the CBoT, wheat took a step back, closing 2,7% higher at $5.45 per bushel. Soybeans closed 2,8% higher at $10.41½ per bushel. Corn also rose in the last trading session, closing 1,3% higher at $4.76½ per bushel.
According to analysts, the positive mood on the grain markets is largely due to the Wasde report of last Friday (10 January). The American harvest figures for corn and soybeans were revised downwards in the January edition of the report. The expected ending stocks are also smaller than previously anticipated by the USDA. Last Friday, the prices were on the rise as a result, and this movement continued after the weekend.
Customs figures from China gave soy an extra boost. In calendar year 2024, the world's largest soy importer imported a record amount of soy, according to figures published yesterday. China imported 105,03 million tonnes of the oilseed. That is 6,5% more than in 2023. Good margins for soy processors and the fear of a trade war with the US pushed soy imports to great heights, according to analysts.
trade war
Therein lies a danger. Whether or not Trump will keep his promise to impose a 60% import duty on products from China when he moves into the White House next week is not yet certain. Nothing can be said about possible Chinese countermeasures. What we do know is that China has used the past year to build up a soy stockpile. In addition, China has good relations with various suppliers and is not as dependent on soy from the US as it was eight years ago. The margins of Chinese soy processors are also under pressure. In that respect, the cards for soy are less favourably shuffled in the coming period than you would expect based on the rally of the past few days.
Wheat did close in the green last trading session, but according to several analysts that was mainly because wheat was sucked along in the wake of corn and soy. The fact that the USDA estimates the area of winter wheat to be higher than the trade expected, seems to have been forgotten.
Moderate Russian export week
UkrAgroConsult estimates the upcoming wheat harvest in Ukraine at 55 to 65 million tons. This means that Ukraine would thresh slightly more in 2025 than the 54,3 million tons of the last harvest. The agency estimates exports at 40 to 50 million tons. North Africa, the Middle East and Asia will be the most important sales markets, according to UkrAgroConsult. Demand for grain and oilseeds is growing there, the market agency writes.
Demand for wheat from Russia is a bit disappointing. Last week, Russia exported 410.000 tons compared to 550.000 tons a week earlier. Last week, the Russian Orthodox Church celebrated Christmas. Many companies are closed then and that could be an explanation for the moderate export. The Ikar quotation for Russian Black Sea wheat has remained unchanged at $237 per ton.