There's a chance of a thunderstorm, but otherwise, it's excellent threshing weather. This favorable weather will continue for a while, if the weather reports are to be believed. The wheat harvest in Europe could then be largely completed. Wheat growers are currently struggling with demand. Exports in both the EU and Russia are disappointing in the first weeks of the season. Meanwhile, players in the grain market are very curious about what Trump and Putin will discuss next Friday.
The September wheat contract on the Matif closed yesterday up €1,75 at €194,50 per tonne. Wheat also rose modestly on the CBoT, up 2 cents to $5,07 per bushel. Corn closed 2 cents higher at $3,74 per bushel last session. Soybeans were the biggest gainer last session. The August contract gained 11 cents to $10,23 per bushel.
According to weather reports, the warm and, more importantly, dry weather will continue for another week in much of Europe. A chance of thunderstorms is possible. If that turns out well, the wheat harvest in Europe could be largely completed, according to various sources. Meanwhile, European wheat exports are struggling to get off to a good start. Up to and including August 10th, 1,43 million tons of wheat were exported, compared to around 3,28 million tons a year earlier during the same period.
Slow exports
The Black Sea region is also experiencing warm and dry weather, accelerating the harvest there. According to the Russian Ministry, Russia has harvested 47% of its grain acreage this season, totaling 75 million tons. Last week, the Ministry released a harvest estimate that the total Russian grain harvest this season will likely reach 135 million tons. Incidentally, Russian grain exports via seagoing vessels last July were 40% lower than exports in the same month a year earlier.
With exports in mind, wheat market players are curious about the outcome of the meeting between Trump and Putin in Alaska next Friday. Ukrainian President Zelenskyy is not attending the summit but has already indicated that Ukraine will not give up any territory for peace with Russia. He is supported in this by several European leaders (who were also not invited), who emphasize to Trump that Russia cannot be trusted under Putin. Trump, in turn, says that Russia will suffer the consequences if they do not end the war.
Competition
Trump's trade policy is another important factor in the grain market, or rather, soybean. Trump wants China to import more soy from the US, but Beijing seems reluctant. Reuters reports, citing various trade sources, that China is stockpiling soybeans in South America. According to the sources, China is building up stockpiles in the third quarter so that if things get tense later this year, they won't have to enter the market for soybeans. Without import duties, US soybeans are about $40 per ton cheaper than Brazilian soybeans, according to Reuters. With the 23% tariff China has imposed on US soybeans, North American soybeans are about $50 more expensive than South American soybeans.