The grain market is feeling a bit more positive. A new tender from North Africa is instilling some confidence. Relations between China and the US remain strained, but Japan is reporting somewhat more friendly sentiments toward the US. Within the US, much of the commotion among farmers is focused on the USDA support program, which has been halted by the shutdown. According to the Secretary of Agriculture, this is now starting to change.
The December wheat contract on the Matif closed yesterday up €1,50 at €189,75 per tonne. Grains also closed higher on the CBoT. Wheat rose 3 cents to $5.03¾ per bushel. Corn closed 3 cents higher at $4.23 per bushel. Soybeans also rose 4 cents to $10.34¾ per bushel.
Market bureau Ikar has revised its forecast for the Russian wheat harvest upwards by 0,5 million tons to a total of 88 million tons. According to the bureau, wheat yields have been higher than anticipated. Ikar has kept Russia's wheat export forecast unchanged at 44,1 million tons. Ikar has also revised its corn harvest forecast upwards, from 15 to 15,3 million tons. The new forecast also raises the expected corn exports by 300.000 tons to 4,1 million tons.
Lowest price apparently not the only thing that counts
A tender from Algeria has boosted the wheat market's mood. After recently securing 450.000 tons, the country has purchased another 50.000 tons, according to sources. The price, according to insiders, is just under $259 C&F (freight paid), and the wheat likely originates from the Black Sea region or Argentina. French wheat is relatively cheap on the global market and also affordable for Algeria in terms of transport, but due to diplomatic tensions between Paris and Algiers, Algeria refuses to buy wheat from France. The previous tender also included some wheat from the US, which is also competitively priced. Some analysts find it somewhat surprising that Algeria has not purchased wheat from there this time.
In the US, Trump is once again commanding attention. Whether Trump and Xi will be able to resolve their differences over trade relations remains a major question mark. In the run-up to the meeting between the two presidents in less than two weeks, the lower echelons will first meet in Malaysia. A boost for the US, in any case, is that Japan's new prime minister may be willing to import more soy, natural gas, and pickup trucks from America. This is according to various news outlets.
Agriculture is given priority
There's a lot of commotion among American farmers about the Farmer Aid program, a federal government support program somewhat similar to our Common Agricultural Policy (CAP). Due to the US government shutdown, the Department of Agriculture (DfA) is also operating at a low ebb. The Farm Service Agency (FSA), responsible for providing loans to farmers, among other things, is completely closed. US Secretary of Agriculture Brooke Rollins announced that this agency will reopen this week.
Rollins stated that payments from certain support programs are crucial for farmers. The resumption of certain USDA operations, according to some, demonstrates the White House's flexibility in determining which government functions remain open during a shutdown, in order to achieve political goals.
Meanwhile, President Trump is trying to exert maximum pressure on Democrats by halting funding for projects in states that voted for Kamala Harris in the 2024 election, while resuming farm aid and continuing to process economic data crucial to calculating the increase in Social Security benefits for seniors. Rollins told Fox Business on Tuesday that $3 billion will be distributed to farmers and added that the administration will soon announce a supplemental support plan to address the problem of "China blocking our soy farmers' access to the market."