The wheat market showed a cautious plus in the last trading session. According to experts, the attack by Ukraine plays a role in this. Egypt has secured wheat from France, as announced by Reuters. This is a boost for the ailing French wheat export. In the US, the first combines have been taken out of the shed and a start has been made with the wheat harvest. Corn and soybeans in the US are doing less well than some expected, despite the early sowing.
The September wheat contract on the Matif closed yesterday €1,75 higher at €202,50 per tonne. On the CBoT, wheat closed yesterday 0,7% higher at $5.39 per bushel. Corn closed 1,2% lower at $4.38¼ per bushel. Soybeans also took a step back, closing 0,8% lower at $10.33½ per bushel.
The large drone attack by Ukraine deep inside Russia, in which Ukraine claims to have damaged or destroyed dozens of Russian bombers, did not go completely unnoticed on the grain market on the first trading day of this week. It does not directly affect grain exports, but analysts expect Russia to take military action. In addition, the tensions between the two countries are not easing and the peace negotiations are not getting any easier.
Ikar keeps the price for Russian wheat unchanged at $225 per ton. According to Ikar, exports are declining. The agency expects Russia to export 1,2 million tons of wheat in June. In May, Russia exported 2,1 million tons of wheat.
New customer for France
French wheat exporters have a windfall. Reuters news agency reports that Egypt has been shopping in France and has bought 180.000 tons of wheat. The deal is not entirely recent. According to Reuters, the agreement may have been concluded in April, possibly when the French president was in Egypt. Delivery was scheduled for May and June but has been delayed. The prices are said to have been set at $246 per tonne for immediate payment and $256 per tonne for payment after 180 days covered by a letter of credit.
It is one of the first major deals of the new import vehicle Mostakbal Misr, which took over the tasks of the old import body Gasc in December. Gasc was part of the civilian government of Egypt, while Mostakbal Misr is part of the Ministry of Defence. This link with defence made trade via tenders, as Gasc used to do, more difficult. The new purchasing organisation has little experience with the international grain trade and because, among other things, it lacked a registration in the trade register, international companies are cautious in doing business with Mostakbal Misr. Local Egyptian importers have therefore acted as intermediaries in recent times. Egypt imports approximately 5 million tonnes of wheat annually.
For France, the demand from Egypt is a stroke of luck. Algeria used to be a major buyer of French wheat, but due to rising diplomatic tensions between Algiers and Paris, the North African country is buying virtually no wheat from France. Algeria has a conflict over the border with Morocco, and France has sided with Morocco. Meanwhile, France (the EU's largest wheat producer) has had difficulty competing with the relatively cheap wheat from the Black Sea region, including Russia and Romania.
Despite early start, corn in US struggles
The USDA released this week's Crop Progress report yesterday. Of the planned corn area, 93% is in the ground, which is equal to the five-year average. 78% is now also above and that is 1 percentage point more than the average. The condition of the corn has improved slightly compared to last week with 69% good or excellent compared to 68% last week. Last year, 75% of the area was good or excellent. With the sowing of soybeans, American growers are slightly ahead of the average with 84% of the planned area sown this season compared to 80% in the five-year average. This week, the condition of the soybeans was also included for the first time this season. 67% of the area is good or excellent. This makes the picture comparable to corn. Despite the fact that sowing was done relatively early, the condition of both crops is not great for this phase of the season.
The winter wheat harvest has now started in the US. On June 1, 3% of the area was dried, which is equal to the five-year average. The winter wheat that is still standing has remained virtually unchanged, with 52% of the area in good or excellent condition. Last year, that percentage was 49%.