Analysis Grains
Grain in US under pressure after Trump's victory
You will not have missed it: yesterday there were elections in the US and Trump returns to the White House. The commodity markets reacted nervously, but, as several analysts indicate, Trump is a bit of a loose cannon. What Trump is going to do remains guesswork. Another notable news came from Russia. It may not make the headlines, but the Russian Minister of Agriculture casually mentioned that the Russian grain harvest will be up to 22 million tons lower.
Wheat on the Matif closed €0.25 higher at €214 per ton yesterday. On the CBoT, grains also closed in the green. The biggest gainer was wheat, which closed 0.7% higher at $5.72½ per bushel. Corn gained 0.5% and reached $4.18½ per bushel. Soybeans closed 0.7% higher at $9.93¾ per bushel.
The winner of the US elections was known faster than many expected. Not all votes have been counted yet, but Trump has already secured 270 electoral votes and can thus return to the White House after a four-year hiatus. Traders in the commodity markets are already anticipating Trump's victory. In the Asian markets, oil, metals, and soy are under pressure while the dollar rises. Trump's idea of a 60% import duty on goods from China is not positively received in the markets.
In the agricultural commodities, all eyes are especially on soy. China is reducing its dependence on soy from the US and buying more of the oilseed in South America. However, soy remains the largest agricultural export product to China from the US. Countermeasures from Beijing could therefore hit the American market hard. Several analysts also note that Trump is somewhat unpredictable. What exactly he will do and how it will turn out remains guesswork. As of writing, wheat is 1% lower on the CBoT, soy 2%, and corn 0.2%.
Unfavorable weather costs Russian farmers tons
News from Russia was somewhat overshadowed but is still very relevant. The Russian Minister of Agriculture told the Russian state media that the grain harvest in the country will be 20 to 22 million tons lower than in earlier forecasts. The total harvest will thus remain at around 130 million tons compared to 150 million tons in previous expectations. The minister cites unfavorable weather as the cause. The western part of Russia suffered from drought, and in various regions in the central part of the country, growers faced waterlogging.
In Ukraine, farmers are almost done sowing winter grains. According to the Ukrainian Ministry of Agriculture, 95%, or 4.91 million hectares of the planned area, has been sown. Of the sown area of winter grains, 4.3 million hectares are winter wheat, 543,600 hectares are winter barley, and 67,900 hectares are rye. Due to the dry summer and autumn, the winter grains are not in great condition, as reported by various local sources.
Tender news from Egypt
According to various sources, the Egyptian state buyer Gasc has secured 290,000 tons of wheat in a tender. The average price is said to be around $275 per ton C&F (cost and freight), which is more than $10 higher than the reports circulating yesterday, to which Gasc did not respond. The wheat secured comes from the Black Sea region.
In the EU, exports continue to struggle. According to the latest figures from the European Commission, 7.76 million tons of wheat have been exported until November 3. Last year, the figure was 11.33 million tons. The export is thus 32% behind last season.
