2023-06-21 18:55:07
THE grain prices continue the rebound that began three weeks ago, in a market now dominated by the weather, the “weather market”, and in particular by the drought in the United States, the world’s largest corn producer.
Operators took a “slap” on Tuesday evening with the publication of the weekly report from the US Department of Agriculture (USDA), which reveals a further deterioration in the cultivation conditions for yellow grain, “the worst since 1992”, indicates Damien Vercambre, from the Inter-Courtage firm.
Ce water deficit causes tension on the Chicago Stock Exchange, but also worries the European market, with “nervous” wheat in recent days, underlines Gautier Le Molgat, of the firm Agritel (Argus Media France). Still on the rise on Wednesday, its price stood at 246 euros per tonne at 2:00 p.m. GMT.
“The”weather market“generates movements which are amplified by the financial sphere”, whereas in reality, it is necessary to wait until July, during pollination, to better estimate the yield of crops, explains Mr. Vercambre.
This type of episode driving prices up often occurs in June, when crops are growing, and it “is generally short-lived” before the market focuses more on demand, believes Dewey Strickler, of Ag Watch Market Advisor.
On the other hand, rains fell last weekend in the southeastern United States, and more rains are also expected to bring water to Corn belt soybeans and corn in the coming days, he indicates.
At the same time, European wheat, whose price has risen, is faced with extremely competitive prices offered by the Russians, who are looking for consumers to offload their colossal stocks. According to Agritel, theAlgeria would have bought in recent days almost “ 630,000 tons of wheat mainly of Russian originwith unbeatable prices.
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The Ukrainian corridor “in the background”
“With such a strong price difference, the Russians risk gaining a lot of market share,” analyzes Mr. Le Molgat, to the detriment of European and American wheat exporters. According to him, the uncertainties hanging over the extension of theUkrainian grain export agreementwhich will expire on July 18, have “passed to the background” behind the weather-related fears.
During the visit of an African mediation delegation to Russia at the end of last week, Moscow once again accused the West of blocking Russian grain and fertilizer exports with its sanctions.
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“Many operators have given up” on the continuation of this agreement, which has made it possible to bring out of Ukraine more than 31 million tonnes of grain by the Black Sea, estimates Damien Vercambre. This has supported wheat prices, without causing them to soar.
The campaign is coming to an end before the start of the new harvest and “there is a little maize left (in the silos), but it is a little less vital than when the agreement was initially instituted”, he said. he indicates.
In addition to European ports on the Danube or in the Baltic, “Ukraine can still use rail. It’s more difficult and more expensive (…) but it’s doable,” said Dewey Strickler. On the other hand, the Ukrainian harvest promises to be reduced by at least 30%, according to Mr. Vercambre, because of mined areas or those passed under Russian control, which will limit the volume of grain to be stored.
China, the first beneficiary of grain shipped through the corridor ahead of Spain and Turkey, is currently continuing to load corn, and should soon have reached the 5.5 million tonnes imported thanks to this agreement.
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