Analysis Grains
Wheat makes a move on the Chicago market
Fundamentally, there are no major changes when it comes to wheat. The traders in Chicago were not interested in that. Wheat was on a significant rise there. For corn and soybeans, the focus is mainly on Argentina. Warm and dry weather is not favorable for the crop development in Argentina.
The March contract for wheat on the Matif closed €1.75 lower at €231.25 per ton yesterday. In the US, wheat was the biggest gainer within the grain complex during the last trading session. The March contract rose on the CBoT by 2.1% to $5.40½ per bushel. Corn increased by 1.6% to $4.57¾ per bushel. Soybeans also closed in the green, rising by 1.2% to $9.92½ per bushel.
After the dip last Friday, wheat in Chicago showed a strong recovery. The trade was partly supported by the weekly exports reported by the USDA, which exceeded the market's expectations by 15 million bushels. A lower dollar and upward momentum in other grains also contributed. Fundamentally, not much has changed in the wheat market, some analysts emphasize. A cold front is moving over the US, but due to the large amounts of snow that preceded it, there is little risk of winterkill.
There is no snow in eastern Ukraine, southern Russia, and western Kazakhstan. Dryer weather than usual is predicted for the next ten days in those regions. The condition of winter grains in these countries remains a point of attention. From September to December, Kazakhstan exported 3.7 million tons of grain, as reported by the country's Ministry of Agriculture. This is 54% more than the same period a year earlier. The exports to Uzbekistan, Tajikistan, Afghanistan, and Kyrgyzstan have significantly increased according to the Kazakh ministry. The export to Iran has improved by a factor of 30 according to the ministry.
Dry Summer in Argentina
In soybeans and corn, the weather forecasts for Argentina were the driving force behind the rally in the last trading session. The two major exchanges in Argentina (Buenos Aires and Rosario) report crop damage due to the dry and especially warm weather in Argentina. After sufficient rainfall in the Argentine spring, the weather has now turned in the summer. The hot and dry summer in the southern hemisphere is starting to cause damage in Argentine corn and soybeans for the upcoming harvest, both exchanges write. According to the Rosario exchange, an average of 35 millimeters fell in the provinces of Buenos Aires and the southern Santa Fe in December, compared to the historical average of 110 millimeters for this month.
87% of the planned corn acreage in Argentina has been planted according to the Buenos Aires exchange. The expected corn acreage is 6.6 million hectares. The exchange expects 18.4 million hectares of soybeans to be planted this season, with 93% already in the ground. The wheat harvest in Argentina is almost complete. According to the forecast of the Buenos Aires grain exchange, 95% of the harvest is done.
