In the past week, the grain markets have been lively and buoyant. Last week (Thursday) the closing price for wheat was EUR 295 per tonne for the March contract. Yesterday, Thursday, it was still EUR 284.25 per tonne. In the middle of the week in particular, grain went clearly south. The fundamental news has changed little, rather the focus of market participants has shifted. The local cash markets were particularly quiet at the beginning of the week. There was hardly any turnover in the carnival regions on Monday and Tuesday. Isolated quantities were handled in the north and east. Most of the quotations for bread and feed wheat, but also for corn and barley, have fallen. With the course setback on Wednesday, the willingness to sell in agriculture increased. However, market participants are also assuming that the producers will increasingly want to clear their warehouses before the spring sowing and the associated field work. Mills are showing restraint in their business activities due to weak demand for flour. Most feed mixers also act cautiously.The greater willingness among pig farmers to stall is not yet effectively reflected in the demand for feed due to the lack of piglets. On the international market, after concerns about the future of the Ukrainian grain corridor last week, market participants are now focusing on increased competition due to the Russian harvest. In a speech on the state of the nation, Russia's President Putin emphasized the efficiency of Russian agriculture and, unlike previously, published significantly higher expectations for his country's export business. The renewed weakening of the euro compared to the US dollar is providing tailwind for European exporters. Overall, however, export demand is reportedly calm. Iraq is active on the world market with a tender and is looking for 200,000 tons from the USA, Canada or Australia. Offers from Russia of the European Union are excluded. US wheat shipments were also weak this week and expectations for the US export bookings published on Friday are not particularly high either. Because the strong US dollar and the competition from Russia are also depressing the mood at the CBoT.In yesterday's Agriculture Outlook Forum, the USDA gave an initial assessment of the acreage for the coming harvest. Accordingly, US farmers have or will plant spring and winter wheat on an area of 49.5 million acres (about 20 million hectares). This means that the acreage should be as large this year as it has not been since 2016. In advance, analysts had expected a much smaller area. Despite the higher crop forecast, wheat contracts on the CBoT paused their downtrend yesterday. This is mainly due to technical reasons. The weather forecast for the previously too dry southern Great Plains has improved significantly with forecasts of precipitation. The prices for corn on the Euronext/Matif have hardly changed this week. The front month of March, which will expire shortly, closed yesterday with a daily gain of EUR 3.50 at EUR 295.25/t. On Thursday last week, 295 euros/t for the contract was on the display board at Euronext in Paris. However, the most traded June contract fell significantly on a weekly basis. Overall, however, corn prices are higher than wheat prices. On the cash markets, corn trading remains calm.However, the listings have recently given way. Corn futures in Chicago went south this week. The front month of March closed yesterday on the CBoT with a settlement of 660.25 US cents/bu (245.29 euros/t). The Department of Agriculture expects the area under cultivation in the USA to be around 2.4 million acres (approx. 0.97 million hectares) larger than in the previous year. There are no changes in the news situation from South America. While the Brazilian harvest is likely to be significantly higher than in the previous year, the prospects for the Argentine harvest are being revised downwards from week to week. According to reports and forecasts by the meteorologists, an improvement in the weather situation is not to be expected for the next 8 to 10 days.
ZMP Live Expert Opinion
This Friday marks the first anniversary of the invasion of Ukraine. The tensions are unlikely to decrease on this sad anniversary and the main question for the grain markets is how the grain corridor will continue. Russia recently criticized the agreement, Ukraine is trying to extend it for at least 12 months. It will be important how the negotiations, which are about to begin, go. This week's volatility is therefore likely to continue in the coming days and weeks.
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