Actively managing a market is no easy task. That's something Russian grain exporters are also finding out now. They are not adhering to the proposed minimum prices yet, while exports are already decreasing. In the US, the harvest of corn and soybeans is progressing smoothly, as shown in the new Crop Progress report. Brazilian farmers can finally pick up the pace with planting soybeans, but there is still much to be done. Partly due to healthy demand, corn and soybeans were on the rise in the last trading session.
The December wheat contract on the Matif closed €2.25 lower at €224.25 per ton yesterday. Wheat on the CBoT mostly moved sideways. The December contract closed half a cent lower at $5.72¼ per bushel. Corn showed a slight increase and closed 1.2% higher at $4.09½ per bushel. Soybeans lagged slightly behind corn with a 1.1% increase. The November soybean contract closed at $9.81 per bushel.
Scattered showers in the east of Ukraine and the south of Russia put some pressure on the wheat market. Various local sources warn that not enough rain has fallen to truly solve the drought problems in the area. More rain over a larger area is needed to really get the winter wheat in the region going. Time is running out as winter is almost upon us.
Russian grain exporters are not adhering to their own minimum prices. The Ikar price for Russian Black Sea wheat has risen by $4 to $234 per ton. However, the floor price set by the Russian Union of Grain Exporters for October is $240 per ton, $245 for November, and $250 for December. The higher price seems to be costing Russia some exports. According to SovEcon, 1.01 million tons of grain were exported last week, down from 1.28 million tons the previous week. Of the grain exports, 940,000 tons were wheat compared to 1.19 million tons the previous week.
Rain misses the American wheat belt
In the US, rain has also fallen, but most of it fell west of the wheat belt. Planting of winter wheat continues steadily. 73% of the planned area is planted, according to the new Crop Progress report from the USDA. Last year at this time, 74% had been planted, with the five-year average at 76%. Wheat growth is slightly behind, with 46% above ground. The five-year average is 50%.
American farmers are making good progress with corn harvesting. 65% has been harvested this week, up from 47% last week. Last year at this time, 55% had been harvested, with the five-year average at 52%. Soybeans are 81% harvested, compared to 72% last year and 67% in the five-year average. Excellent yields are reported in western Illinois and Iowa in the 2024 Crop Watch tour. However, other parts of Illinois are not meeting the high expectations, according to Crop Watch.
Slow soybean planting
In Brazil, soybean planting is progressing slowly. According to market agency AgRural, 18% of the planned area had been planted by last Thursday. This is a significant increase from the 8% planted the previous week. However, last year at this time, 30% had been planted. While the rain is helping Brazilian soybean growers, planting is still at its slowest pace since 2020/21, according to AgRural. Particularly in the largest soybean-producing state of Mato Grosso, progress is not going well.
A healthy demand for soybeans and corn gave the market a boost in the last trading session. The USDA's weekly corn export figure of 1 million tons was at the upper end of the trade's expectations. Soybean exports from the US also reached 2.43 million tons towards the upper end of the expected range. Some analysts believe that exports attracted the interest of speculators, who entered the market and provided additional support.