The soybean market isn't quite following the pattern you'd expect. Chinese customs officially announced that China didn't buy any soybeans from the US in September. Instead, Brazil and Argentina supplied almost all of their soybeans. Nevertheless, soybean prices rose on the CBoT, fueled by hopes for a trade agreement between China and the US. Europe could well see some real winter weather in the coming months. While it's still a long way off, some weather models predict the weak polar vortex will increase the likelihood of cold weather.
The December wheat contract on the Matif closed yesterday down €0,75 at €188,50 per tonne. On the CBoT, wheat closed 1 cent higher at $5.04¾ per bushel. Corn rose ¾ cent to $4.23¼ per bushel. Most of the movement on the Chicago exchange last trading session was not in grains, but in soybeans. Soybeans closed 12¼ cents higher at $10.31¾ per bushel.
The fact that soybeans have reached their highest closing price in a month is, in a sense, remarkable. Figures released yesterday by Chinese customs show that for the first time since 2018, China did not import any soybeans from the US in September. Last year, China imported 1,7 million tons of soybeans from the US. Almost all of the soybeans China imported last month came from South America. Brazil, with 10,96 million tons, accounts for 85% of total Chinese imports. This means Brazil exported 30% more to China last September than in the same month a year earlier. Argentina saw its soybean exports to China increase by 92% in September compared to a year earlier. In terms of tons, this amounts to 1,17 million tons of soybeans going to China. In total, China imported 12,87 million tons of soybeans in September, the second-largest monthly import ever.
Hope for agreement
The fact that soybean prices have risen on the CBoT despite the lack of demand from China has a lot to do with talks between the US and China on trade relations. This week, a meeting between US Treasury Secretary Scott Bessent and Chinese Vice Premier He Lifeng is scheduled in Malaysia. The following week, Trump and Xi will meet in South Korea. The somewhat softened tone of the US officials fuels hopes that the two major powers can reach a trade agreement.
In Brazil, 24% of the planned soybean acreage has been sown, according to figures from AgRural. Last year, this week, the figure was 18%. And, importantly, rain has also fallen in Brazil. Rain fell early in the sowing season, prompting some growers to sow earlier than usual. However, the rain then failed to materialize, causing emergence problems. Some fields with very uneven emergence may need to be reseeded, according to some sources, but the rain, especially for the soybeans sown a little later, is coming just in time.
The wheat market remains relatively stable. Ikar raised the price for Russian wheat by $2 to $231 per ton. In Ukraine, wheat exports are down 22,6% this season compared to last. According to the latest figures from Ukraine, 5,68 million tons of wheat have been exported as of October 20.
Cold coming?
The weather could cause considerable unrest in the wheat market in the coming months. It's still a relatively long way off, but some meteorologists predict that a weak polar vortex could bring cold weather to Europe between December and February. Western Europe would have to be incredibly cold for this to lead to a prolonged winter. Besides the fact that temperatures are unlikely to drop so low for extended periods in our country, nor in France or Poland, that frost damage would cause problems, the cold (if it does arrive) will likely be accompanied by precipitation in the form of snow.
The situation is different for Russia and Kazakhstan. There, weather models indicate a colder-than-average weather pattern this coming winter, and less precipitation is forecast. This is a long-term forecast, and some caveats apply.