The international wheat market was extremely volatile this week and was mainly characterized by speculation surrounding possible Chinese purchases. While SRW and HRW wheat in Chicago and Kansas climbed to new multi-month highs in the middle of the week, a noticeable correction set in towards the end of the week. The background to this was China's late but now confirmed order for 120,000 tons of US wheat, which, however, fell far short of the rumours of the previous days. As a result, prices did not receive a boost despite the news. A lack of official export data due to the ongoing government shutdown in Washington also had a negative impact, even though estimates pointed to active foreign business. In Russia, stable export prices and an increase in export estimates led to the view that international competition will remain high due to the expected harvests, in addition to the targets from Argentina and Australia. In the EU, the weak euro helped to keep French wheat exports competitive. France also made up for missing export data, which significantly increased total EU exports. Nevertheless, Euronext wheat recently closed lower after the rally in Paris had previously stalled.
The trend on the maize market was less dynamic, but also characterized by many impulses. At the beginning of the week, friendly export data and the soybean market environment supported prices. Inspections reached a seasonal record level and sales volumes were also quite high within the estimated range. However, weak data from the soy complex and a yield estimate from StoneX, which was considered optimistic by market participants, had a negative impact. Brazil also continues to play a role: maize exports there were up on the previous year in October and a strong increase is also expected for November. In Paris, the upward trend continued until Thursday, before the first profit-taking set in on Friday.
ZMP Live Expert Opinion
The markets were directionless last week and susceptible to emotional reactions to unconfirmed information. On the wheat market in particular, rumors were enough to cause prices to rise for several days before the late confirmation of a much smaller China deal triggered a correction. Whether this exhausts the potential for further buying remains to be seen. Strong export demand remains a positive signal for corn, but the good supply situation in Brazil and the prospect of high US yields are weighing on price expectations. In the absence of official USDA data, estimates and emotions are likely to continue to dominate the market.
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