Analysis Grains
Russia puts the brakes on the European wheat market
The rally on the grain market does not continue on the first trading day of the new week. Wheat took a step back on the futures market in Paris while a modest gain was recorded in Chicago. Cheap wheat from the Black Sea region puts a ceiling on the market. In the US, farmers have started harvesting corn, as shown in the new edition of the Crop Progress report.
The September contract for wheat on the Matif closed €5 lower at €194 yesterday. The December contract, where most trading is done, held up better and lost €0.75 to close at €218 per ton. On the CBoT, the grains closed in the green. Wheat gained 0.4% and reached $5.55½ per bushel. The increase in corn remained modest at 0.1% to $3.84¼ per bushel. Soybeans closed at an even $10.00 per bushel, a 1.1% increase.
The supply of relatively cheap Black Sea wheat is putting pressure on prices in Europe. Market agency Ikar lowered the price for Russian wheat by $1 to $215 per ton. SovEcon, on the other hand, raised the range by $1 to $218 to $221 per ton. In short, prices for Russian wheat remain fairly stable, and the rise on Western futures markets is not followed by the Russian bear. Some analysts believe that Black Sea wheat is capping the market.
Egypt still has the tender to secure 3.8 million tons of wheat open. This has been confirmed by various sources, including the minister in charge of the Egyptian state procurement agency Gasc. Egypt has so far only purchased 300,000 tons in this tender and is still looking for 3.5 million tons of wheat. The Nile country is open to collaboration from all suppliers and state companies, as reported.
Start of corn harvesting
In the US, the harvest of summer wheat is progressing steadily. According to the new edition of the USDA's Crop Progress report, 85% of the area has been harvested. The five-year average is at 83%. Barley has been harvested for 89% compared to 87% in the five-year average and 86% last season. Preparations for the new harvest are also underway. Currently, 6% of the planned winter wheat area has been sown. The five-year average is at 6%, and last year at this time, 5% had been sown.
The condition of corn in the US has been slightly revised downward by the USDA. 64% of the area is rated good or excellent, up from 55% last week. For comparison, last season, 52% were rated good or excellent. The condition of soybeans remains unchanged at 65%. Corn harvesting has begun. As of September 8, 5% of the area has been harvested. The five-year average is at 3%, and last season, 4% had been harvested. According to the USDA, 29% of corn in the US is in the ripening stage. Soybean harvesting has yet to begin and is not included in this week's Crop Progress report. It won't be long before it starts. A quarter of the soybean area is shedding leaves and entering the ripening stage.
