Last week, the wheat markets were impacted by weak international price targets and a generally comfortable global supply situation. In Chicago, SRW and HRW quotations fell to new multi-year lows at the beginning of the week, weighed down by a largely smooth harvest in the northern hemisphere and stable to falling export prices in the Black Sea region. While the USDA reported solid weekly US export inspections, the decline in EU soft wheat exports over the course of the season was a clear warning signal. Prices stabilized slightly towards the middle of the week before receiving a noticeable boost on Thursday from a significant increase in US weekly export sales and a South Korean tender. Euronext followed the fluctuations with temporary short covering, which, however, fizzled out again in the meantime.
Bearish harvest estimates dominated the corn market. Analysts expect a record US harvest, supported by favorable growing conditions and stable stock valuations. Even repeated USDA reports of larger sales and solid export inspections were initially unable to halt the downward trend. Weak ethanol production in the US and concerns that Trump's new tariffs could dampen demand also had a negative impact. It was not until the end of the week that there was a recovery, driven by very high new crop sales and moderate gains on Euronext. International momentum was provided by weaker Brazilian export figures for July, which nevertheless rose month-on-month.
ZMP Live Expert Opinion
The grain markets continue to be driven by the weather and exports, but the overall trend for corn remains clearly bearish as long as the record expectations are maintained. Wheat has received a short-term tailwind from the recent strong export sales, but remains under pressure from a comfortable global supply situation. The decisive factor in the coming days will be whether institutional investors start to liquidate their short positions in wheat - this could trigger a rapid change in direction. In the case of maize, market participants are likely to keep an eye on weather developments in the Corn Belt in particular, as a heatwave could cost yield potential regionally. The influence of the US dollar and international trade policy remains a factor of uncertainty. All in all, recoveries currently tend to be technical counter-movements in a downward trend.
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