There is a lot to say about Donald Trump, but he is certainly not boring. Now that it is clear that import duties will not be introduced immediately, a sigh of relief went through the American market. Outside America, plenty was also happening. Egypt is on the market for wheat and there are critical voices about the European export figures. In South America, it is again supporting soy.
The March wheat contract on the Matif closed yesterday €4,75 higher at €231,25 per tonne. On the CBoT, wheat also made a big move, closing 3,7% higher at $5.58¾ per bushel. Soybeans followed fairly closely behind wheat, up 3,2% to $10.67¼ per bushel. Corn also closed in the green, but with 1,2% to $4.90 per bushel, corn's gains were slightly more limited.
The fact that Trump did not impose tariffs on his first day in the White House, but first wanted to review existing trade agreements, gave the grain market support on the first trading session after a long weekend in the US. Wheat received additional support now that Trump is pulling out the 'Phase 1 trade agreement' of January 2020. In that agreement, China agreed to import an additional $200 billion in goods and services from the US over a period of two years. China would also remove barriers to exports for meat, dairy, animal feed and biotechnology, among other things. China has not adhered to the agreements and imported 57% of the promised $200 billion. After the agreement was ratified, China imported 2020 million tons of wheat from the US in the 21/9 season. That was the largest import in 25 years.
Cold in the US and a lack of snow on the southern prairies have almost certainly caused damage to winter wheat, according to local sources. As far south as Kansas and part of Oklahoma, the mercury dropped to minus 20 degrees Celsius. The exact extent of the damage will become clear later. It will take a few weeks before it becomes clear whether the wheat will definitely fail.
Egypt on the wheat market
Other bullish news for the wheat market came from Egypt. According to several sources, the Egyptian state purchasing company Mostakbal Misr (the successor to Gasc) has purchased a significant volume of Russian wheat for delivery in January and February. Exact details of the volume and price have not been disclosed. Ships with a combined loading capacity of over 250.000 tonnes are en route to the port of Novorossiysk. Not all of this will go to Egypt, but it does indicate that Egypt has not placed a small order, according to some analysts.
The EU exported 19 million tonnes of wheat this season up to and including 11,74 January. That is 37% less compared to the same period last season. Criticism of the European export figures is growing. Since the export season 2023/24, the export figures for Bulgaria and Ireland have been missing from the overview of the European Commission. Since the beginning of 2024, the figures for France have been incomplete and for seven weeks the figures for Italy have also been incomplete. Complete export figures do not seem to be a priority in Brussels.
More trouble in South America
Soybeans were supported by reports from South America. In recent days, insufficient rain has fallen in the important agricultural regions of Argentina. At least that is what the Rosario grain exchange states after analysts had already lowered the yield forecast due to the warm and dry weather. In Brazil, rain is causing problems with the soybean harvest. According to Agrural, 1,7% of the soybean area has been harvested, compared to 6% this time last year. The harvested area is the smallest since 2021. The harvest is delayed in the important soybean state of Mato Grosso, among others. The rain is also not conducive to the quality of the soybeans.
With the slow pace of the soybean harvest, the sowing of corn as a follow-up crop is also delayed. 0,3% of the area of second crop corn has been sown according to AgRural. Last year, 4,9% corn was sown. The harvest of first crop corn has progressed to 4,1% compared to 7,9% last season.