The international wheat market was weak in the last trading week of the year. In the USA, winter wheat varieties in particular came under pressure. SRW and HRW wheat fell significantly over the course of the week, while spring wheat was only slightly weaker in Minneapolis. The main reason for the weak price performance was disappointing US export figures. The weekly sales figures fell short of expectations, in some cases significantly, and were considerably down on both the previous week and the previous year. Although US wheat exports in the current marketing year are up 22% on the previous year, momentum has slowed noticeably of late. Geopolitical signals, such as possible peace talks between Ukraine and Russia, were initially received neutrally by the market. Revised forecasts for the global supply situation also had a negative impact: the Buenos Aires stock exchange raised its estimate for the Argentinian wheat harvest and the Russian export outlook was also revised slightly upwards by SovEcon. Euronext wheat was also weaker, albeit with limited losses.
The maize market was also unable to escape the downward trend. Weaker export shipments and declining ethanol production led to significant price losses on the CBOT at the beginning of the week. Although the USDA report at the turn of the year provided a bullish impulse with a sales volume of 2.2 million tons, this largely fizzled out. The ethanol figures had an ambivalent effect, as rising output was accompanied by growing inventories. The European maize price followed the trend and also closed lower.
ZMP Live Expert Opinion
Weak fundamental data gained the upper hand at the end of the year. Declining US exports of wheat and maize are weighing on sentiment, even though the longer-term trend for maize exports remains positive. Additional pressure is being exerted by the increased supply forecasts from Argentina and Russia, which are ensuring robust competition on the global market. However, the weak end of the year does not necessarily set the tone for the start of the year. The upcoming USDA reports and possible geopolitical developments will be decisive. In the short term, however, the downward trend is likely to continue, especially as technical support levels have recently been breached.
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