The grain markets started the week on a weak note, dominated by the upcoming WASDE report. Wheat prices fell at the start of the week both in Chicago and on Euronext. The WASDE then brought only moderate adjustments: Global inventories were reported slightly lower than in January and were below average expectations. However, adjustments in Canada, Argentina and the EU remained within a range that did not trigger an immediate trend reversal. The market only gained momentum towards the middle of the week. Robust US export sales above expectations and weather risks in Russia led to significant premiums for SRW and HRW wheat. On Euronext, the March contract followed the positive momentum. At the same time, higher French inventories and lowered export forecasts for the EU dampened the upward potential.
Corn hardly moved at first. The WASDE reduced US ending stocks slightly and global stocks were also set somewhat lower. However, the adjustments remained manageable. Strong US export figures for the marketing year to date and a reported individual sale had a supportive effect. Impulses also came from the energy market: ethanol production increased significantly. Towards the end of the week, a lower Brazilian harvest estimate also helped after Conab lowered its forecast for the second harvest. Overall, wheat and maize ended the week on a firm note.
ZMP Live Expert Opinion
Following the subdued WASDE report, the markets have drawn fresh impetus from the export business in particular. If the momentum in US sales continues, this could further stabilize prices. The weather in Russia remains an uncertainty factor with a potentially price-driving effect. At the same time, comfortable stocks in parts of Europe are limiting larger mark-ups. In the case of maize, the focus is shifting to developments in Brazil. Overall, a sideways to friendly trend seems likely, provided there are no new surprises.
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