The Ukrainian Farmers' Association warns that winter wheat and rapeseed in the country will not emerge unscathed from the cold that has gripped Ukraine for several weeks. It will also be truly cold in the US this weekend. However, this will have only a limited impact on the market. Moderate export figures are weighing more heavily on trade. To boost exports, the Russian Minister of Agriculture came up with an idea...
The March wheat contract on the Matif closed unchanged yesterday at €189,50 per tonne. On the CBoT, wheat closed 2 cents lower at $5.07¾ per bushel. Corn fell 2 cents to $4.21¾ per bushel. Soybeans were up, closing 11 cents higher at $10.64½ per bushel.
The weather forecasts are receiving more attention in the grain market. It's getting a bit colder in our region, but not cold enough to trigger market activity. This is different in Ukraine. The Ukrainian Farmers' Association (UAC) writes that an ice crust and extremely low temperatures in eastern, southern, and central Ukraine have likely caused damage to winter wheat and rapeseed. Temperatures down to minus 18 degrees Celsius, freezing rain, and sleet have left a layer of ice on crops in some areas. "An ice layer several centimeters thick that lasts for several weeks is not good for wheat or rapeseed," the UAC writes in its weekly report. "There is a risk that the cold has damaged crops." The precise extent of the damage will become clear in the coming weeks, the association adds.
Snow in the U.S
There's also a lot of buzz in the US about wintry conditions forecast for the coming weekend. The cold front is expected to be preceded by snow, according to weather models. Temperatures could drop significantly, with temperatures dropping to around 20 degrees Celsius (68 degrees Fahrenheit) on the southern prairies. The prospect of moisture, even in the form of snow, on the dry prairies apparently outweighs the risk of wintering out for wheat market players. Some sources say that localized frost damage is highly likely, as the cold is accompanied by considerable wind.
Export is lagging behind
Moderate demand for wheat and ample stocks mean there is limited room for improvement in the wheat market. The EU exported 11,83 million tons of wheat through January 15, according to the European Commission's latest export figures. This means exports are 2% behind last season.
Russia is also facing an export pace that doesn't align with the Kremlin's wishes. Putin wants to increase agricultural exports by 50% by 2030. Russian Agriculture Minister Oksana Lut said yesterday at a dairy sector conference that Russian companies should establish food processing facilities with government support. "It will no longer be possible to win cooperation between countries simply by supplying raw materials. That's why we need to come up with investments," Reuters news agency quotes Lut as saying.
Soybeans, unlike grains, have seen more momentum. This is partly due to rain in Brazil. The soybean harvest, which has just begun there, has been temporarily halted. However, a more important factor, according to analysts, is that China has actually purchased 12 million tons of soybeans from the US, as agreed to by President Trump. Traders are breathing a sigh of relief that the US action in Venezuela and Trump's claim to Greenland haven't caused Beijing to pause trade with the US.