The French Ministry of Agriculture has revised downward the yield figures for wheat. The French harvest of soft wheat is the smallest since 1986. Considering the EU yield figures, it is not entirely illogical that wheat exports continue to lag behind last season. Export data from the US caused more commotion. Soybeans from the US are very competitive in the global market. So much so that Argentina is importing soybeans from the US for the first time since 2019.
The December contract for wheat on the Matif closed €1.25 lower at €219.25 per ton yesterday. On the CBoT, wheat also took a small step back. Wheat lost 0.5% and closed at $5.75¾ per bushel. Corn increased by 0.4% to $4.12½ per bushel. There were only small shifts in soybeans during the last trading session. The December contract closed 0.1% higher at $10.06 per bushel.
The lag in wheat exports from the EU is not really being made up. Up to September 15, 5.39 million tons of wheat have been exported compared to 6.99 million tons in the same period last season. The lag from last season remains stable (at 23%) compared to last week. Due to disappointing yields, the EU also has less to export. The French Ministry of Agriculture yesterday lowered the yield estimate for soft wheat from 26.32 million tons to 25.78 million tons. The harvest of soft wheat is thus the smallest since 1986.
Russia dares to buy a little more wheat
SovEcon slightly raised its forecast for the Russian harvest yesterday after a series of reductions. The agency now expects a yield of 82.9 million tons. In the previous forecast, SovEcon assumed 82.5 million tons. The USDA, with 83 million tons, is slightly higher than SovEcon for the expected Russian grain harvest.
In the first six months of 2024, wheat prices were largely (substantially) lower than in the first half of 2023. Nevertheless, Egypt, in terms of import value, imported significantly more wheat this year. In the first half of 2024, the country on the Nile imported $2.1 billion worth of wheat compared to $1.7 billion in the same period a year earlier.
Argentina buys wheat in the US
An interesting transaction is found in the USDA's export figures. For the first time since 2019, Argentina has bought soybeans from the US. The volume of 88,400 tons may not be very spectacular, but for many analysts, it comes as a complete surprise and is a sign that soybeans in the US are very cheap. It is not uncommon for Argentina to buy soybeans. According to some sources, soybeans for delivery in October can be loaded onto the ship in the port of New Orleans for about $395 per ton. This makes soybeans from the US roughly $16 per ton cheaper than Argentine soybeans.
In the past twenty years, the processing capacity of soybeans has expanded more rapidly than soybean cultivation in Argentina. High taxes and significant fluctuations in exchange rates have had an impact on the agricultural sector in Argentina. In order to keep the factories running, Argentine processors buy soybeans, mainly from neighboring countries Brazil and Paraguay. Due to low water levels in rivers, the volume of soybeans that can be transported via these waterways is limited.