Wheat opens slightly stronger on ‘no deal’
Wheat futures have opened marginally higher following the Labor Day holiday in the US and the failed talks between Erdogan and Putin to resume the grain deal.
I keep hearing that Ukraine doesn’t need the grain deal now as their infrastructure is damaged and it will take time to repair it. Russia still benefits as wheat exports grow, see below
Following a meeting between Putin and Erdogan in Sochi, both sides were unable to come to a compromise on the resumption of the grain deal. Putin blamed the West again and Erdogan didn’t push back to find any middle ground and even went so far as to say, “Ukraine needs to soften its approach”.
The leaders instead confirmed plans to send 1 million tons of Russian grain via Turkey to African nations concerned the disruptions would raise food prices.
Soybeans opened higher last night but saw that rally sold again, as they have across the past week; one more stressful weather day is left here in the heart of the belt before temps finally ease and rains eventually arrive.
Egypt’s GASC bought 480k tonnes of Russian wheat in a private deal late last week with lower pricing than in traditional tenders, reportedly priced at $270/ tonne C&F, along with 60k tonnes of Bulgarian wheat at a similar price; they are holding more private talks with suppliers early this week.
SovEcon reported August Russian grain exports at 6.1 MMT, up from 5.6 MMT in July, with wheat exports at 5.3 MMT vs 4.4 MMT last month.
ABARES cut their official Australian wheat production estimate by 800k tonnes this month to 25.4 MMT, now down 36% from last season’s crop.
Private consultancy AgRural pegged Brazilian second-crop corn harvest at 88% complete as of the end of August, up five points on the week but still behind 98% at this point last season. First crop corn planting for 2023/24 was seen at 13% done, up from 8% last week and 9% a year ago. The country’s Ag Ministry is also reportedly approving requests from large Mato Grosso soybean producers to plant soybeans before the September 15 start date.
StoneX Brazil on Friday increased their 2023/24 soybean production estimate from 163.4 to 163.6 MMT, with first crop corn output down from 28.6 to 28.2 MMT this month. Second crop corn production for the current 2022/23 crop was increased from 108.3 to 109.1 million tonnes.
Ukraine grain traders union UGA yesterday raised their 2023 grain and oilseed production estimate from 76.8 to 80.5 million tonnes.
Mpls wheat +2
KC wheat -1
Chic wheat +4
Matif wheat -1
Soybean oil -50