Wheat and corn were under significant pressure on the stock market in the week that is now coming to an end. The leading March contract for wheat closed last Friday at 213.25 euros/t, and at the closing bell yesterday Thursday it was still 205.25 euros/t on the Euronext/Matif scoreboard in Paris. Accordingly, prices on the cash markets were also under pressure. Corn closed yesterday with a daily loss of 2.25 euros at 176.75 euros/t, significantly lower than on Friday of last week. The closing price was 181.50 euros/t in the front month of March. At the start of today's trading day, there are once again red signs for corn, while there is still no clear direction for wheat. Little has changed recently in the basic framework conditions. Price competition from Ukraine and Russia is particularly strong in Europe and is putting a strain on demand. At the same time, Ukraine is currently proving to be particularly capable of delivering despite war and the lack of a grain agreement. In January, Ukraine was able to ship around 6.3 million tons of agricultural goods across the Black Sea, more than in the existing months of the grain corridor and roughly as much as in the months before the war. The difficult situation on the Red Sea also results in higher transport costs. On the spot markets in Europe, producers are still expected to have high inventories, but overall trade remains subdued. The compound feed industry is somewhat more active again, but overall remains on track. After the recent price drops, farmers often only show a limited willingness to sell. When it comes to corn, additional offers from Eastern Europe are also coming onto the German market. Yesterday's WASDE was particularly decisive for the wheat trade this week. In its report yesterday, the USDA slightly increased the outlook for global wheat production in the current season compared to the previous month and now expects 785.74 million tons. However, the previous year's result was still undercut. Consumption is also increasing, so that the final stocks are expected to be lower than in January and, at 259.44 million tons, also significantly below the volumes of the previous year. The USDA forecasts more wheat in Argentina, where 15.5 million tons (+0.5 million t) are now expected. The European harvest was slightly reduced by 300,000 tonnes to 134,000 tonnes.
The 2023/24 corn harvest is still expected to be significantly higher than the 2022/23 harvest. Although the USDA cut production by more than 3 million tons, the harvest will still be noticeably larger than last year at 1.232 billion tons. Accordingly, final stocks increased by 22.06 million tons compared to the previous year, even if these were also lower than had been expected in January. Particular attention was paid to Brazil and Argentina in advance. For Brazil, the harvest was reduced by a significant 3 million tons to 124 million tons. For Argentina, the USDA did not change its forecast and continues to expect a corn harvest of 55 million tons. The import volume for Europe has been slightly reduced from 23.5 million tonnes to 23.0 million tonnes.
ZMP Live Expert Opinion
The pressure on the grain market continues. Although the USDA has increased production expectations for wheat, the great international competition triggered by export prices in Russia and the Ukraine's good delivery ability continued to put American and European prices under pressure. The corn harvest, which is even more plentiful than last year, is triggering additional price pressure, even if the harvest estimates are lower than in January.
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