Chicago Board of Trade (CBOT) futures for corn, wheat, and soybeans have recently reached multi-month highs, influenced by a weakening U.S. dollar, easing trade tensions, and adverse weather conditions in South America.
- Corn (CBOT March): Increased by 0.3% to $4.96 per bushel, marking a 15-month high at $4.98½.
- Soybeans (CBOT March): Decreased by 0.2% to $10.72½ per bushel after achieving a six-month peak.
- Wheat (CBOT March): Rose by 0.7% to $5.80¾ per bushel, reaching a three-month high.
Fundamental Insights
Trade War Concerns
- The U.S. delayed tariffs on Mexico and Canada by a month, preventing an immediate trade escalation.
- China’s retaliatory tariffs did not include soybeans, supporting expectations of continued Chinese purchases of U.S. soybeans.
- A weaker U.S. Dollar Index, slipping for the second consecutive day, enhanced the attractiveness of U.S. grains in global markets.
South American Weather & Supply Concerns
- Argentina: Severe drought impacting soybean and corn yields, with further downward revisions likely.
- Brazil: Heavy rains delaying soybean harvest and subsequent safrinha corn planting, which could impact global supply in the coming months.
- The unfavorable conditions in South America have further supported bullish sentiment for corn and soybeans.
Black Sea Supply & EMEA Demand
- Russian Wheat Exports: Slowing due to logistical constraints and increasing domestic price intervention.
- Russian wheat prices have surged to a three-month high due to drought and reduced production forecasts. As of October 3, 2024, the price for Russian wheat with 12.5% protein content was assessed at $228.50 per metric ton FOB for late October to early November loading.
- Ukraine & Danube Exports: Gradual recovery in shipments despite ongoing logistical challenges.
- China & Australian Wheat: China reportedly delaying imports of 600,000 metric tons of Australian wheat, offering some cargoes to alternate buyers, reflecting weak Chinese demand and potential opportunities for European wheat exporters.
- EU Demand: Rising due to tightening supplies from Russia and uncertainty over winter crop conditions in France, Germany, and Ukraine.
Regional Insights & Implications - EMEA Market
- North Africa: Algeria and Egypt’s wheat tenders remain strong, with Algeria diversifying imports beyond Black Sea origins. Egypt remains a significant buyer of Russian wheat, purchasing 1.4 million metric tons in September. However, overall Russian wheat exports have declined, totaling 2.2 million metric tons in January, down from 3.6 million in the same month the previous year.
- Middle East: Saudi Arabia’s wheat and barley procurement is increasing to secure reserves, supporting the global grain trade.
- Europe: Lower-than-expected EU wheat and barley production forecasts are supporting regional price strength.
- Turkey: Continuing purchases of Black Sea wheat and corn to maintain domestic supply balance.
Recent CIF Prices and EMEA Tender Forecasts
As of October 19, 2024, the following FOB prices were reported for November 2024 to January 2025 shipments:
- Wheat:
- Ukraine 11.5% protein: $230–$235 per metric ton
- Russia 12.5% protein: $240–$245 per metric ton
- Romania 12.5% protein: $245–$250 per metric ton
- Argentina 12.0% protein: $240–$245 per metric ton
- Corn:
- Argentina: $205–$200 per metric ton
- Brazil: $205–$210 per metric ton
- Ukraine: $215–$220 per metric ton
- Soybeans:
- Argentina: $405–$395 per metric ton
- Brazil: $420–$395 per metric ton
Given the current market dynamics, including adverse weather in South America and supply constraints in the Black Sea region, CIF prices for upcoming EMEA tenders are expected to remain firm or potentially increase.
Importing countries in the EMEA region should anticipate higher procurement costs and consider diversifying their sourcing strategies to mitigate risks associated with supply disruptions.
Strategic Outlook
The grain markets are currently exhibiting a bullish trend, driven by easing trade tensions, supply challenges in key exporting regions, and unfavorable weather conditions affecting crop yields. Stakeholders should closely monitor developments in South American weather patterns, lack Sea export activities, and global trade policies to make informed decisions in this environment.
GrainFuel Nexus® will continue to provide real-time updates as new trends emerge.
GrainFuel Nexus® | Expert Commodity Intelligence & Strategic Advisory
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