Wheat prices came under pressure at the start of the week, weighed down by the significantly higher production forecast from Argentina. The Buenos Aires Grains Exchange raised its estimate to 25.5 million tons, unsettling the markets in addition to the already dominant exports from Russia. Above-average yields are also emerging in Australia. While SRW and HRW wheat on the CBoT recorded losses at the beginning of the week, prices recovered in the middle of the week in view of the intensified war situation in the Black Sea. Drone attacks on Russian cargo ships and the threat of a naval blockade by Putin caused risk premiums to return to prices. Algeria's tender also contributed to stabilization. Nevertheless, the overall mood remained subdued in view of the weak export figures from the USA. In Canada, the statistical office surprised investors with an upwardly revised harvest forecast, which again took the momentum out of wheat prices towards the end of the week. Prices on Euronext fluctuated sharply, recovered in the middle of the week but fell again on Friday.
On the corn market, the rally initially continued at the start of the week, driven by old USDA data with surprisingly high export bookings. However, profit-taking quickly set in, supported by bulging inventories in North America. In the meantime, geopolitical tensions and transportation problems in the Midwest led to rising prices, before news of high Brazilian export expectations for December weighed on prices again. Despite a strong US export report at the end of the week, further price gains failed to materialize. On Euronext, the market was weaker across the board and only followed the US trend selectively.
ZMP Live Expert Opinion
Despite geopolitical tensions in the Black Sea, the fundamental conditions for wheat and corn remain characterized by a comfortable global supply. The harvests in Argentina and Canada are developing better than expected and are putting pressure on prices. Although war-related risks repeatedly lead to short-term price increases, there have been no clear signs of a sustained upward trend so far. The maize market is also volatile despite strong US export figures, as the supply side prevails. Should Brazil actually export as much as forecast in December, this could put further pressure on prices. Overall, the market remains in a wait-and-see mode with a slight tendency towards weakness.
You see historical data because you're not logged in or not a ZMP Live+ member. Get your information advantage now!
