The futures markets for wheat, corn and soybeans reacted mixedly in anticipation of the February edition of the Wasde report. Wheat in particular – recently the best boy in the class – is under pressure. In Europe, the opposite is true. There, wheat and corn again booked gains.
A day before the release of the supply and demand report, American analysts and traders are busy. Their mood is reflected in the stock prices on the CBoT. Wheat closed at $5,79.50 per bushel, compared to $5,82.75 on Friday. Corn came in at $4,57.3 per bushel (from $4,87.50) and soybeans were unchanged at $10,49.50.
corn production
The Americans expect support, especially for corn. The trade estimates that the analysts of the American Department of Agriculture will adjust the South American production figures. It has been hot and dry in Argentina and that has an impact on corn production. Estimates are 49,1 million tons of corn, which is almost 2 million tons less than reported last month. The production of soybeans also decreases by almost 2 million tons.
Brazil may be able to absorb this decline. The estimate there is 170,2 million tons, which is 2 million tons more than in January. Corn remains almost unchanged at 126,6 million tons. In the US itself, there is still speculation about the stock figures to be published. They could well be positive (bullish) fall out, but not every analyst agrees. The 'bulls' hope that bullish news in the Wasde report can push the corn contract back above $5. That idea is supported by the funds, which are holding a record number of net long positions on the CBoT. The number of contracts has not been this high since April 2022.
European wheat plus
Wheat lost the most. In Paris, it was a different story. The March contract ended at €236,75, which is €2 more than what it ended with last week. Corn also did slightly better. The price increased to €1,25. What plays a major role in Europe is the news from the Black Sea region. And then in particular reports about the weather. Will there be another severe period of frost, is there enough snow and what is the moisture status of the soil. Incidentally, significant snow is predicted in Russia.
Not only in Russia, but also in Ukraine it is very dry. According to the Ukrainian National Agricultural Academy, it has not been this dry in seven seasons. Between November and January, an average of 79 millimeters fell, while the normal is 117 millimeters. The moisture content in the soil is also extremely low. Farmers in the country sowed 5,24 million hectares of winter wheat last autumn.
Record export Russia
In addition to the weather factor, Russia's export position also plays a crucial role for European exporters. They have seen most deals pass them by in the first half of the export season, due to poor quality and excessively high prices. Egypt bought 6,3 million tonnes of Russian wheat between July last year and January this year. That is 70% more than in the same period a year earlier. This is evident from Russian export figures. According to the Reuters news agency, total wheat exports are at a record high. Up to February, it amounted to 32,2 million tonnes, which is 1,3% more than last season.
On February 15, new export restrictions will come into effect, which will reduce export levels. Buyers and sellers have therefore already anticipated these measures. Until July 1, Russia can still sell 10,6 million tons of wheat, within the rules of the export quota. After Egypt, Bangladesh is the second largest buyer of Russian wheat (2,3 million tons). Turkey is in third place, followed by Algeria and Kenya.
Lean season
The European Union, and France in particular, still has some catching up to do this export season. French figures showed last month that the country's wheat exports were at their lowest in 25 years. Especially since Algeria and China are failing to deliver, where Russia is now the lord and master. FranceAgriMer expects 66% less export this year, which means the lowest export volume since the 1996/97 season.