Analysis Grains
Freezing cold in us wheat belt no cause for panic
The last trading day of 2024 closed in the green on the grain market. Drought in Argentina and a moderate condition of winter grains in Russia supported the market. Damage from a cold front in the US is said to be limited as it is accompanied by snow.
The March wheat contract on the Matif closed €3 higher at €237.25 per ton in the last trading session. Prices also closed higher on the CBoT. Wheat closed 0.6% higher at $5.51½ per bushel. Corn increased by 1.4% to $4.58½ per bushel. The biggest gainer was soybeans, closing 1.7% higher at $9.98¼ per bushel.
In addition to the weather forecasts for Russia - some precipitation but mainly too warm for the time of year - and Argentina - dry - there is now also more attention to the weather in the US. Temperatures on the prairies have dropped well below freezing. The onset of winter cold is accompanied by snow. The risk of frost damage in winter wheat is said to be limited according to local sources due to the snow providing a protective blanket.
Relatively large wheat harvests in Australia and Argentina (where the harvest is currently underway) are putting some pressure on the wheat market. In another agricultural powerhouse in the southern hemisphere, Brazil, farmers are showing less interest in wheat. At least that's what the Brazilian market bureau Cepea says. The area planted with winter wheat has decreased by 12% to 3 million hectares. Due to decreased wheat prices and moderate yields per hectare, Brazilian farmers have planted less wheat. However, the harvest for the 2024 growing season is not much smaller compared to the previous year. The average yield in Brazil is estimated at 2.6 tons per hectare, which is 13% more than the previous season. The total Brazilian wheat harvest is estimated at 8.1 million tons, which is 0.4% lower than in 2023.
Genetic Modification in China
China is focusing more on genetic modification to increase crop yields and enhance food security. Last Tuesday, the Chinese Ministry of Agriculture announced the approval of 5 gene-edited and 12 genetically modified varieties of soybeans, corn, rice, and cotton. In gene-editing (CRISPR-Cas), genes present in the plant family are used, unlike genetic modification, where genes from outside the plant family are used. Two soybean varieties and one each of wheat, corn, and rice that have been developed using gene editing are now approved in China. Many of the genetically modified crops in China, such as corn and soybeans, are used in animal feed. Like in Europe, Chinese consumers also have concerns about the safety of genetically modified crops.
