The grain market was in a minor mood last trading session. Somewhat remarkable because there was quite a bit of bullish news. SovEcon sounded the alarm about the export and stock figures for Russia that they saw as too optimistic. In Argentina, the two major grain exchanges in the country reported disappointing growth of corn and soy due to the hot and dry weather. In the US, they are not in the grip of heat but of cold air that crosses the North Pole from Siberia.
Wheat on the Matif closed yesterday €2,25 lower at €226 per tonne. On the CBoT, prices were also in the minor key. Wheat had to take a big hit and fell by 1,7% to $5.37½ per bushel. For corn, the loss was limited to 0,9% to $4.74½ per bushel. Soybeans were the biggest loser and lost 2,3%. That brought the March contract to $10.19 per bushel.
The export of grain from the Black Sea region remains a work in progress. Yesterday, market bureau SovEcon came up with new expectations. Russian wheat exports for January are estimated at 1,8 to 2,2 million tons by the bureau, compared to 3,6 million tons last year. For the entire 2024/25 export season, SovEcon estimates Russian exports at 43,7 million tons. That is significantly lower than the 46 million tons that the USDA is counting on. "Given the volumes already exported and the quotas, the USDA's forecast is unrealistic," SovEcon writes. Limited exports and small stocks will support the wheat price later in the season, the bureau expects. Ending stocks of wheat are estimated at 10 million tons, compared to 20,2 million tons last season. Of that end stock, 3,7 is in state silos as intervention stock.
Hot and dry
In Argentina, the weather is not cooperating. High temperatures, little precipitation, low humidity and very high solar power are not doing the crops, especially corn, any good, according to the Rosario grain exchange. The Argentine corn harvest is estimated at 48 million tons in the new forecast. In the previous forecast, this was 50 to 51 million tons. The estimate for the soybean harvest in Argentina has been lowered by 500.000 tons to 53 million tons. Sowing soybeans in Argentina is as good as done. According to the Buenos Aires grain exchange, 98% of the planned area is in the ground. However, the condition of the soybeans is not improving. The Buenos Aires exchange gives 32% of the soybean area a good or excellent rating, compared to 49% last week. 21% of the soybeans are in bad to very bad condition, compared to 8% last week.
In Brazil, the growing year is going much better than in Argentina. An alternation of dry and rainy days does not make planning any easier for the growers. The sowing was already somewhat delayed and now that the first combines are running, they are sometimes out of action due to the rain. The yields of the early soybeans are somewhat average according to the first reports, but the total Brazilian soybean harvest is heading for a record. Agroconsult increased the harvest forecast by 200.000 tons to 172,4 million tons versus the 169 in the last Wasde report.
No warm welcome for Trump
In the US, people are obsessed with the arctic blast That moves from the north over the prairies to the Midwest and then moves towards the East Coast. After a few mild days in the wheat belt, it will cool down quickly this weekend. Because there seems to be little snow preceding the cold front, wintering out of wheat in Kansas, Oklahoma and Texas remains a real risk, warn several analysts. Next Monday is the inauguration of Donald Trump and then the cold air will reach Washington DC. According to the weather reports, the mercury will then drop to 4,5 degrees below zero with a wind chill that can drop to minus 20. That is the coldest inauguration since 1985 when Ronald Reagan was running for his second term and it was almost 14 degrees below zero.