Analysis Grains
Algeria has made Christmas purchases in the grain market
These are not the busiest days in the grain trade, but prices on the CBoT in Chicago did make a jump yesterday. Wheat received support from a tender from Algeria. Corn and soybeans were on the rise due to, among other things, the weather forecasts for Argentina. Good harvest forecasts for soybeans in Brazil could, according to some analysts, create a ceiling in the soybean market.
There was no trading on the Paris exchange for two days due to Christmas. The March wheat contract on the Matif closed last Tuesday at €231.25 per ton. The CBoT was open yesterday. The March wheat contract closed 1.2% higher yesterday at $5.41 per bushel. Corn also increased by 1.2% and closed at $4.53¾ per bushel. Soybeans performed slightly better than the grains with an increase of 1.3% to $9.88 per bushel.
Algeria brought some life to an otherwise fairly calm grain market this week. State buyer OAIC reportedly purchased 630,000 tons of wheat in the tender that closed on Tuesday. OAIC does not disclose details about the tender. According to trade sources, Algeria is paying around $257 to $258 per ton C&F (cost and freight) for the wheat. The previous major tender from Algeria was at the end of October, where 600,000 tons were secured for $263 C&F.
Among the eight companies that sold wheat in the tender, there is also reportedly a French grain trader. This is remarkable as France has traditionally been a major supplier of grain to Algeria. Diplomatic relations between France and Algeria have cooled considerably over the past year, and in a previous tender, OAIC excluded wheat from France. Traders suspect that a significant portion of the wheat in this tender comes from the Black Sea region. In addition to Ukraine and Russia, Bulgaria and Romania are also mentioned as suppliers.
Tight supply
Disappointments in Russia are said to be creating a certain underlying strength in the wheat market, according to analysts. Russia's total wheat harvest is estimated at 82 million tons. In the largest wheat-growing region, the 2024 harvest was 30% lower compared to the previous year. The lower yield is attributed to late spring frost followed by a dry summer.
For the 2025/26 season, the Russian Ministry of Agriculture expects to export 36.4 million tons of wheat. This is a significant step back compared to the current season, where the USDA estimates Russian exports at 47 million tons.
Drought in Argentina
Argentina is attracting attention in the corn and soybean trade. Important growing regions in Argentina are experiencing dry conditions with no rain forecasted in the coming days. Some analysts believe this could trigger a new round of purchases. For soybeans, the upward potential is limited by supply from Brazil. The growing season in Brazil is progressing fairly well, and it won't be long before the first soybeans are harvested. Conab expects Brazil to export 105.5 million tons of soybeans in the 2024/25 season.
