The grain markets are weaker this week. Prices for wheat on Euronext/Matif continued to fall today (Friday), with losses of up to 2.28% in the front month of September 2024. The closing price yesterday was 251.25 euros/t, with a daily low of 241.00 euros/t traded today. However, prices have firmed somewhat since the daily low. Maize is also falling this week and is also showing red signs today. The situation on the CBoT is no different.
The yield losses in Russia have now been priced in. The weather situation there has improved and the concerns about very large yield losses in the Russian harvest are diminished as a result. Growing conditions have also improved for Ukraine. Although export prices in Russia have continued to rise, the rally of the past week shows that Europe's exporters are barely competitive. Ukrainian traders came out on top in a tender from Egypt. The Russian bids, which according to information were not successful, were again 10 US dollars lower than those from France. Market observers also expect goods from the Black Sea region to win a tender from Tunisia for feed barley. Europe's wheat exports up to the 49th calendar week of the marketing year reached a volume of 28.169 million tons, falling behind the previous year's volume. In the same period last year, 29.57 million tons were exported. Barley was also exported less. Corn imports were also significantly below the previous year's volume. On the other side of the Atlantic, the situation in Russia is also playing an important role. An increased estimate for Australian wheat production is also causing pressure. Weekly export sales were at a low level but in line with market participants' expectations. Spring wheat sowing is progressing rapidly and the harvest has already begun in the southern states and has started more quickly than the average of the last five years.
On the cash markets, prices are following the trend on the exchange. The volumes traded remain manageable and there are fewer discussions about ex-harvest contracts in view of the declines on the futures markets.
ZMP Live Expert Opinion
It remains to be seen whether grain prices have already reached their high for the year and left it behind. At present, the news and arguments for falling price expectations predominate. Export competition from the Black Sea is strong and yield prospects have improved. Only the harvest will show how high the loss from the cold spell will be.
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