Europe was on its own on the grain market yesterday. Steering from the US was largely absent because the stock exchanges there were closed for a national holiday. Saudi Arabia secured a third more wheat in a tender than originally planned and in Russia the vice-governor of Rostov was arrested for malversation of agricultural subsidies.
The March wheat contract on the Matif closed yesterday €3,25 lower at €229,50 per tonne. The CBoT was closed yesterday for President's Day in the US.
The rally in wheat on the American stock exchange last Friday was not continued in Europe yesterday. The cold weather in the US and Russia - with the risk of wintering out - is not really getting a grip on the European market, we can cautiously conclude.
Saudi Arabian state buyer GFSA yesterday announced the results of the tender that closed last Friday. Saudi Arabia has secured 920.000 tonnes of milling wheat at an average price of around $276 per tonne C&F (freight forward). With this, GFSA has secured considerably more than the targeted 600.000 tonnes that were tendered.
The ample supply of wheat from the Black Sea region that we saw in the first half of the season is slowly drying up according to several analysts. There are also some concerns about the upcoming Russian grain harvest due to the dry autumn and now the cold again. According to some analysts, the fact that Saudi Arabia is securing extra wheat fits in with the picture that the wheat market seems to be getting tighter in the coming months.
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Another remarkable piece of news from Russia is that the vice-governor of Rostov has been arrested for abuse of power. The Rostov province is one of the most important grain regions in Russia. Konstantin Rachalovksy is said to have embezzled 155 million rubles (approximately €1,6 million) of government money, according to the Russian news agencies Tass and Ria. According to the Russian secret service FSB, that money was intended for agricultural companies. Last year, growers in Rostov were hit hard by weather extremes. Moscow therefore allocated extra money to support farmers in the province.
Catching up
In Brazil, growers can finally make some progress with threshing soy. Up to and including last Thursday, 23% of the soy area has been harvested, AgRural announced yesterday. This means that Brazilian farmers have harvested 8% of the area in one week. Compared to last season, threshing is still lagging behind. Last year at this time, 32% of the soy had been threshed, according to AgRural.