World grain prices were still on a downward trend at the start of the week, under pressure from the American harvest and strong competition from Black Sea grains, favoring the return of some buyers, notably Egypt.
“We have the impression that the downward trend is on autopilot,” summarizes Sébastien Poncelet, cereals specialist at Argus Media France (Agritel firm).
“We have a wheat market which has erased all of its gains linked to the lowering of prices in two months. Russian harvest forecast for 2024increased from 93 million tonnes at the end of April to 80/82 million tonnes at the end of June,” he underlines.
In continuous decline since the beginning of June, the tonne of soft wheat rose slightly on Wednesday on Euronext, trading in the afternoon around 224 euros on the September deadline, the earliest.
On the Chicago Stock Exchange, a bushel (27 kg) for delivery in July closed Tuesday evening at $5.7 (compared to $7 at the end of May).
In the United States, “the harvests are putting wheat prices under pressure” and Investment Funds continue to bet on the downside, remaining oriented towards selling, notes Michael Zuzolo of Global Commodity Analytics and Consulting.
In the American Great Plains, the harvest is already half complete. “On wheat, the first yields are much better than expected even though the weather was very dry during ripening.
And as in Russiathe first harvest figures are also above expectations, this penalizes the (price of) wheat,” analyzes Arlan Suderman of the StoneX brokerage platform.
He believes that “the early ripening of wheat will encourage second soybean crop in the southern part of the Midwest.”
American market observers are eagerly awaiting Friday’s report from the United States Department of Agriculture (USDA) on stocks and rotations in the United States, which could see increased area estimates for corn and soybeans.
“I have customers who had to wait until the beginning of June before sowing corn and finally fell back on soybeans. I would therefore not be surprised to see soybean areas increase more than expected,” comments Michael Zuzolo.
After recent heavy rains in the northern Midwest and Plains region, “crop conditions have deteriorated, but remain better than the historical average. Yields are therefore still expected to be above average and rising stockswhich is weighing on corn and soybeans,” observes Arlan Suderman.
Some importers return to purchasing
Corn prices, which closed lower on Tuesday in Chicago at $4.25 per bushel (around 25 kg), tended to stabilize on the European market, trading on Wednesday just below the 210 euros per tonne mark for August deadline.
The downward pressure accompanying the start of the cereal harvests in the Northern Hemisphere encouraged some importers to return to purchasing.
After a large purchase at the beginning of June (800,000 tonnes of wheat), Algeria launched a call for tenders, undoubtedly more modest, for its ports of Tenes and Mostaganem. Jordan recently purchased 60,000 tonnes of milling wheat.
Egypt purchased a large volume of 470,000 tonnesentirely from the Black Sea, with Romania and Russia taking the lion’s share, with 180,000 tonnes each.
Ousted from the previous call for tenders, Russia this time aligned itself with the lowest prices and its “unofficial floor price was shattered”, underlines the Inter-Courtage firm, noting that the Russian price negotiated on lowest stood at 246 euros per tonne, freight included, or approximately 19 euros cheaper than the French offer.
If it has not yet encouraged a massive return of buyers on the international scene, the drop in prices has “an advantage”, underlines Edward de Saint-Denis, of the firm Plantureux & Associés: “this will reduce food price inflation and ultimately provide relief to consumers.”
