Now that temperatures have risen somewhat in Europe, the US and Russia, the cold of a week ago seems to have been forgotten on the wheat market. US President Trump continues to provide one surprise after another. Now it was the plan again for a levy on Chinese-built ships that call at US ports. Corn and soy were also under some extra pressure due to favourable weather in Brazil.
The March wheat contract on the Matif closed yesterday €2,25 lower at €224,50 per tonne. That is the lowest closing price since early December. On the CBoT, wheat also took a step back, closing 1,9% lower at $5.79 per bushel. Corn made a similar move, closing 1,8% lower at $4.82½ per bushel. Like grains, soybeans were also in the red, losing 1% to close at $10.29 per bushel.
In the US and Russia, there were concerns about frost damage, which supported the wheat price. With the arrival of milder weather, the stories about frost damage seem to disappear like snow in the sun. Yesterday, there were soothing reports from Russia. The late frost period in Russia has caused little damage to winter wheat in the south of the country. At least that is what the Russian State Weather Service says.
The price of Russian wheat is still on the rise. Ikar increased the quotation for Russian wheat by $4 to $251 per ton. Russian grain exports did take a step back. Last week, 510.000 tons of grain were exported according to SovEcon, compared to 570.000 tons a week earlier. Wheat exports remained stable at 420.000 tons.
Trump caused (for a change) unrest in the grain market. Now it was again a plan to impose a €1 million levy on ships built in China that want to call at American ports, regardless of the flag the ship sails under. The plan is not very detailed, but according to several analysts it is a sign that a trade deal between the US and China seems far away. Yesterday Trump also announced that he wants to meet with Ukrainian President Zelensky this week or next week to close a deal on minerals from Ukraine.
Soy was also under some pressure at the CBoT due to relatively favourable weather in Brazil. Last week, growers were able to speed up threshing soy and sowing a follow-up crop of maize. Now some rain is coming and although that is delaying the soy harvest, it is ensuring a good start for the recently sown maize. In Argentina, rain fell in the centre and south last weekend and more is coming. According to sources, this could cause local flooding. However, the rain is passing by in the dry north.