Uncertainty and restraint dominated the international grain markets last week. While wheat continued to suffer from weak export figures and depressed prices, maize was comparatively stable - supported by solid demand and positive production data.
The wheat market got off to a difficult start. US exports slumped by almost half compared to the previous week - a severe setback that put prices under significant pressure. The winter wheat harvest is slightly behind schedule, which could provide short-term support, but did not provide a boost overall. The long-awaited WASDE report from the USDA did not bring any surprises either, which is likely to sadden the bulls somewhat. Nevertheless, there are rays of hope: export orders for the new season are the highest they have been in twelve years. Nevertheless, both farmers and investors are holding back - the former because of the low prices, the latter because of already extensive short positions. The strong euro is also weighing on sentiment in Europe. Wheat remains trapped in a bearish environment.
The situation looked better for maize. Although prices started weaker, they recovered slightly over the course of the week. Sentiment is generally depressed by the good growing conditions in the USA and stock valuations were also raised slightly. Nevertheless, there were new export purchases - for example by South Korea - and a record in US ethanol production. Here too, the WASDE report remained cautious, but adjusted the opening stocks for the new season slightly downwards due to high export figures. Traders were also eagerly awaiting the EPA's decision on the biofuel quota, which could provide additional market impetus.
ZMP Live Expert Opinion
The markets for wheat and corn remain tense and heavily influenced by global developments. In the case of wheat, robust export demand from the USA could have a supportive effect, although good weather conditions and improved condition assessments are weighing on prices. The decisive factor will be whether further impetus comes from geopolitical tensions. In the case of maize, good exports are providing short-term support, but the weather in the US corn belt remains the most important factor in the long term.
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