A few large wheat tenders from North Africa and the Middle East gave the wheat market some support during the last trading session. In the US, the cold snap is not causing major problems in winter wheat. Only in the far south do local sources expect some damage. In Brazil and Argentina, the weather is turning in favour of the arable farmers there. However, the market is barely reacting to this.
The March contract on the Matif closed yesterday €1 lower at €231 per tonne. On the CBoT, grains showed a modest plus in the last trading session. Wheat closed 0,6% higher at $5.77¾ per bushel on the Chicago exchange. Corn made a similar move with a plus of 0,7% to $4.93½ per bushel. In soybeans, the increase was limited to 0,2% to $10.30 per bushel.
Two tenders are giving the wheat market some support. Algeria is reported to have secured around 400.000 tonnes of wheat at $263 per tonne C&F (freight forward) in the tender that closed last Wednesday. The origin of the wheat has not been disclosed. A tender from Saudi Arabia is closing today (Friday 14 February) in which the country wants to secure 600.000 tonnes of wheat.
The French export forecast is not affected by the tenders. FranceAgriMer keeps the export forecast this month almost the same as the January forecast with 9,74 million tonnes. The estimated final stock of wheat in France has been reduced slightly, namely from 2,89 to 2,81 million tonnes.
Snow protects wheat in US
In the US, the cold weather is keeping the wheat market busy. In a large part of the Midwest and the Prairies, snow preceded the cold and the chance of wintering is not that bad. However, the cold front extends to the north of Texas and Oklahoma and there is not enough snow everywhere. Some analysts therefore expect local problems with frost damage on a limited scale. The drought monitor is also being watched with a sidelong glance. In the most important growing areas for winter wheat, the drought monitor remains unchanged with 23% of the area suffering from drought. In the spring wheat region, the dry area decreased by 5% to 40% of the area suffering from drought. Last year around this time, that was 17%. It will now take a while before spring wheat is sown in the northern states and snow has fallen, but sufficient moisture around this time would be more than welcome according to some analysts.
Catching up
In Brazil, rain is a problem, but that is changing according to the weather reports. In the central and central southern part of the country, drier weather is coming next week. That gives farmers there a chance to catch up with threshing soy and sowing corn immediately after the soy harvest. In Argentina, showers are predicted next week. Together with a somewhat cooler weather pattern, that should ensure that the condition of the crops there does not deteriorate further. According to some local sources, it is a bit too optimistic to speak of recovery. On the American soy market, the positive weather reports for South America had little effect. But the increased availability of soy from that continent could have a price-depressing effect in the slightly longer term, according to analysts.