Analysis Grains
Is the weather cooperating, takes wheat price a step back
The weather is finally cooperating for wheat growers in the northern hemisphere. In Europe, farmers have the opportunity to sow the last winter wheat, and in the US and Russia, they are getting the rain they have been hoping for. Russia should be about done with the harvest. This conclusion can be drawn when comparing the statements of the prime minister with those of the minister of Agriculture. The biggest concern on the Chicago market is soybeans, which closed more than 2% higher yesterday.
The December contract for wheat on the Matif closed the last trading session €1.25 lower at €215.25 per ton. Wheat also took a step back on the CBoT and closed 0.3% lower at $5.71½ per bushel. Corn, on the other hand, moved up slightly to $4.27½ per bushel. Soybeans stood out on the Chicago market and closed 2.1% higher at $10.15½ per bushel.
No significant outliers in exports and relatively favorable weather slightly pressured the wheat market in the last trading session. In Europe, it will remain dry in the coming days, allowing for the final winter wheat sowing. The dry weather is also favorable for the harvest of the last crops such as beets and corn. In the east of the Black Sea, where it was dry, some rain has fallen and more is expected this weekend. In the US, rain has fallen on the southern prairies, as reflected in this week's drought monitor. 57% of winter wheat is now in a drought area, compared to 62% last week.
So far, Russia has harvested 128 million tons of grain and oilseeds, as Russian Prime Minister Mikhail Mishustin revealed yesterday to the Russian news agency Interfax. Mishustin mentioned that oilseeds such as soybeans, sunflowers, and rapeseed have performed well. The prime minister did not specify how advanced the harvest is. Earlier this week, the Russian Minister of Agriculture stated that he expects a total harvest of 130 million tons, significantly less than the 150 million tons in previous Russian forecasts.
China boosts soybeans
Soybeans were the most volatile market in the last trading session, largely due to the US elections. Some analysts suggest that China may expedite the export of soybeans from the US before Trump is inaugurated. According to Reuters calculations, China imported 8.09 million tons of soybeans in October, compared to 5.18 million tons in October last year. China has imported a total of 89.94 million tons of soybeans this calendar year, 11% less than last season. The record import of 100.31 million tons is within reach this season. The US agriculture attaché in Beijing expects China to import a total of 104 million tons of soybeans. The expected soybean harvest for China has also been slightly increased to 19.9 million tons by the attaché, partly due to a larger area and relatively favorable weather during the growing season.
This evening, Dutch time, the USDA will release the November edition of the Wasde report. Analysts and traders do not anticipate significant changes in the estimated US corn yield compared to the previous report, according to a Reuters survey. The soybean yield is expected to be slightly lower in the survey. Looking at the global ending stocks of wheat and corn, participants in a Reuters survey expect a slightly bullish report. The wheat ending stock in the new report is expected to be 1 million tons lower than the 257.7 million tons in the October Wasde report. The trade expects the USDA to also reduce the corn stock by 1 million tons. Soybeans are expected to remain nearly unchanged according to the survey participants.
