Things went south for wheat on a weekly basis. Last Thursday in particular, the prices closed with significant losses. Yesterday, for the front month of December, prices fell by 5.50 euros/t to a closing price of 226.25 euros/t. The prices in Paris are still showing red signs until midday this Friday. After what was actually a stable to friendly week, corn also showed clear red signs yesterday and is trending negative again today. At the beginning of the week in particular, the figures from the USDA WASDE report were still having an impact. The global harvest volumes for the current season have been revised slightly downwards to 782 million tons and are therefore below the previous year's result of 789 million tons, but at the same time the ministry is expecting global final stocks to rise, which has put pressure on price developments. The USDA had increased its forecast for the global corn harvest - and very significantly. The previous year's result is also likely to be significantly exceeded. In Europe, the wet weather conditions, particularly in France, are causing hesitant winter wheat sowing. At the same time, FranceAgriMer renewed its forecast for the French wheat harvest, exports and ending stocks on Wednesday.Due in particular to lower demand within Europe, export volumes were reduced overall and final stocks of both wheat and corn increased. According to government information, 3.97 million hectares have been cultivated with winter wheat in Ukraine; the Ministry of Agriculture in Kiev expects a total wheat cultivation area of 4.36 million hectares. However, the Ukrainian grain association UGA had previously announced a significantly lower wheat area and justified this with expensive seed prices and a lack of liquidity among farmers. At currently 10.8 million tonnes, Europe's exports are still below the results of previous years. The recent firmer exchange rate for the euro has resulted in lower competitiveness. However, the strong competition from Russia is the main reason for the weaker export demand. The updated forecast from the International Grain Council also caused price pressure. This assumes that the wheat harvest will be slightly larger than before - in contrast to the USDA - but, like the USDA, increased its forecast for the final stocks at the end of the season. There are also declining forecasts for Argentina.In a forecast published yesterday, the Buenos Aires Grains Exchange assumes a wheat harvest of 14.7 million tons, reducing its previous estimate by 700,000 tons. When it comes to corn in particular, market participants are looking at the rapid harvest in the USA, which continues to have an impact on the price structure. At the same time, the cultivation situation in Brazil and Argentina is anything but ideal. Depending on the region, too much or too little rain causes problems for farmers. The grain exchange in Buenos Aires lowered its estimate for the area under corn cultivation there by 200,000 hectares due to the weather conditions. Friendly export sales this week pushed corn prices up again on the CBoT yesterday. The International Grain Council expects a larger corn harvest compared to the previous forecast and bases this primarily on good harvest results in the USA. Prices on the local cash markets barely moved over the course of the week, but fell significantly yesterday due to the general mood. Sales volumes remain manageable.
ZMP Live Expert Opinion
Grain markets are under pressure due to increased forecasts from USDA and IGC. But the situation also remains tense on the cash markets. Mills are well supplied, concentrated feed plants place orders on sight, but at the same time producers are only willing to sell at the current price level.
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