News from Turkey gave wheat a big plus on the Matif. It was not the unrest surrounding the mayor of Istanbul but the removal of import restrictions that gave wheat the wind in its sails. In the US, the mood was much more subdued due to unexpectedly heavy snow in parts of the prairies. In Brazil, alarms are being raised about the weak financial position of agricultural companies due to lower grain prices and higher costs.
The May wheat contract on the Matif jumped yesterday, closing €5 higher at €227,25 per tonne. On the CBoT, wheat took a step back, closing 0,3% lower at $5.63½ per bushel. Corn was in the green, up 0,7% to close at $4.62 per bushel. Soybeans closed 0,4% lower at $10.08¼ per bushel.
There is unrest in Turkey due to the arrest of the mayor of Istanbul. The center-left Ekrem Imamoglu of the CHP is suspected of bribery and leading a criminal organization, among other things. In 2019, Imamoglu defeated Erdogan's AK Party in the mayoral elections and the CHP wanted to nominate the mayor as a candidate for the next presidential elections on Sunday. However, other news from Turkey caused a revival on the European wheat market. Yesterday it was announced that Turkey wants to phase out the import restrictions on wheat. Due to large stocks, Turkey had erected barriers to largely restrict imports. An additional sales channel would be welcome for European wheat exporters. Due to the extremely wet growing season, the European wheat harvest was relatively small. However, exports are also lagging around 35% behind a year earlier.
Windfall for Russian wheat exports
Other bullish news came from Iran. Iran reportedly bought 500.000 tons of wheat from Russia last week. Exact details of the deal have not been disclosed.
In Russia, however, things are unsettled. While negotiations are underway for a ceasefire in Ukraine, a major drone attack was carried out last night on a Russian air base near the town of Engels, a few hundred kilometres from the border with Ukraine. Russia is talking about the largest drone attack in three years and the governor of the region has declared a state of emergency.
On the CBoT, wheat took a step back last trading session. The weather plays an important role in this. More snow has fallen in the central part of the prairies than predicted by the weather reports. Locally, up to 10 inches (about 25 centimeters) of snow has fallen in places such as northern Kansas and southeastern Nebraska. Not everywhere the same amount of snow has fallen, but according to analysts it has tempered concerns about drought for a while.
Stuck
In Brazil, soybean yields are good and the follow-up crop of corn in the largest state of Mato Grosso has started well. However, according to market bureau RGF & Associados, the Brazilian agricultural sector is not doing well. Due to the relatively low grain and soy prices, sharply increased costs for fertilizers and crop protection products and higher interest rates on loans, farmers are getting into financial trouble. Smaller and medium-sized agricultural companies in particular are getting into trouble or even going bankrupt. The suppliers in the Brazilian agricultural sector are also noticing this. Compared to 2023, 80% more companies in the supply chain have filed for bankruptcy.