Although wheat prices rose on both sides of the Atlantic yesterday, the bottom line was that they entered the new year with losses. While the front month of March 24 closed at a price of 222.50 euros on the last trading day of 2023, yesterday evening at the closing bell it was 221.75 euros/t on the display board of the Paris stock exchange. Corn closed yesterday at 197.25 euros/t, meaning it lost one euro per ton in the first three trading days of the new year. The cash markets in Germany appear calm around the turn of the year. Many dealers appear to be still on vacation and scheduling is just starting up again. The agricultural offering is also not oppressive. However, small quantities are certainly traded. Quotations on the wholesale cash markets fell slightly at the beginning of the year. The reason for the weak start to the year can be found primarily in the great competition from Russia. The exporters there continue to be active on the world market with favorable conditions. Europe's dealers are usually left behind. In addition, the euro increased in value again between the holidays, even though the rate has now fallen back below the $1.10 mark. But Ukrainian exports also continue.Although Russia attacked the important port city of Odessa again with the attacks around New Year's Day and was able to destroy infrastructure, employees there are still preparing larger quantities for shipping. Overland transport and those across the Danube have decreased, also because of the protests in Poland. The weather is causing concern on both sides of the Atlantic. It was far too wet in Europe. The floods may have also affected one or two wheat crops. Frost is now forecast for next week. The wet weather in autumn so far is likely to take its toll on stocks, together with the frosts that have now been reported. Arctic temperatures are also threatening in Russia and Ukraine and, especially yesterday, caused the downward trend to stop. Snowfall has been reported in many regions of the USA for the coming week. American wheat prices were also weighed down by continued weak export reports. When it comes to corn, the news situation in Europe is sparse. Ukraine's current exports are partly a burden. However, things remain quiet on the cash markets around the turn of the year. The better weather forecasts for Brazil are having a global impact.Further heavy rainfall is now forecast, particularly for the north. In some growing regions, up to 115 mm fell after Christmas. Export shipments in the USA have recently been weaker and have fallen short of expectations. In the last week of December, ethanol production also fell again after there were several weeks of highs in production in the week before Christmas. However, ethanol stocks continued to increase.
ZMP Live Expert Opinion
The weather over the next few days could definitely provide a boost for wheat. The stocks in Europe are not in the best condition anyway because of the very wet weather last week since sowing. If the cold wave comes, the stocks are likely to suffer. But what remains is the great competition from Russia and Ukraine. These are likely to continue to weigh on price developments or keep them within limits.
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