Global grain market: wheat is at a four-month high, corn and soybeans rose in price on Thursday

On Thursday, December 07, 2023, wheat futures on the Chicago Board of Trade (CBOT) rose again as a wave of US wheat sales into China continued to stimulate interest from investors. At the end of the trading day, March quotes for soft winter wheat on the Chicago Mercantile Exchange CBOT rose to $235.98 per ton, March hard winter wheat futures KCBT in Kansas City - up to $245.6 per ton, March hard spring wheat futures MGEX in Minneapolis - up to $270.89 per ton.

Chicago wheat futures remained near a four-month high on Thursday, helped by a flurry of US wheat export sales to China. Soybeans rose from a month-and-a-half low and corn also rose as crude oil prices stabilized and a cut in official forecasts for the new crop in Brazil returned attention to mixed weather for the crop.

March wheat futures on the Chicago Board of Trade (CBOT) rose 8-3/4 cents, or 1.4%, to $6.42-1/4 a bushel.

The U.S. government's confirmation Wednesday of private sales of 372,000 metric tons of soft red winter wheat to China brought total U.S. sales to China this week to more than 1 million tons, the largest weekly sales to China since July 2014.

China's buying triggered a flurry of short covering by investors who were betting heavily on falling prices.

The market is now watching to see whether rising US prices will dampen demand as other exporters such as Russia have supplies to ship, as Egyptian wheat tenders showed this week.

“Ten days ago, American wheat was the most competitive in the world. US wheat prices are currently well above EU and Black Sea region prices,” said Ole Howe, director of advisory services at Australian agricultural brokerage IKON Commodities.

U.S. soybean futures rose on Thursday on the back of a new round of export sales and the prospect that Argentina's new President Javier Miley will devalue the national currency when he takes office over the weekend, analysts said.

Additional support for the soybean market was provided by USDA confirmation of private sales of 121,000 tons of U.S. soybeans for shipment to undisclosed destinations in the 2023/24 season.

Separately, Brazilian agriculture agency Conab cut its forecast for the country's 2023/24 soybean crop to 160.177 million metric tons, down from the previous monthly forecast of 162.420 million, citing planting delays. However, the harvest will still be the largest in Brazilian history.

The agency also downgraded its forecast for corn production for the 2023/24 season, reiterating its expectations for a sharp decline compared to the 2022/23 season.

Rainfall in parts of Brazil, where drought is threatening crops, weighed on future soybean prices this week, but concerns remain over a poor start to the growing season.

The most active January soybean contract on the Chicago Board of Trade (CBOT) rose 16-1/4 cents, or 1.3%, to $13.11-3/4 a bushel.

March CBOT corn rose 3-3/4 cents, or 0.8%, to $4.88 a bushel, wheat rose 8-3/4 cents, or 1.4%, to $6.42-1/4 per bushel.

Attention in grain markets will be focused on the USDA's monthly global harvest report due Friday, which will include updated estimates of crop production in South America.

Analysts polled by Reuters expect the USDA to cut its estimates for Brazil's soybean and corn crops in the 2023/24 season.

In its weekly export sales report, the USDA said net U.S. corn sales for the week ended November 30 were 1,288,900 metric tons and wheat sales were 356,400 metric tons, in line with trade expectations.

At the Chicago Board of Trade (CBOT) on Thursday, contracts for delivery in December and January:

wheat (March 2023) - 235.98 dollars/t (21,900 rubles/t) - plus 1.38%;
corn (March 2023) - $192.13/t (RUB 17,830/t) - plus 0.77%;
soybeans (Jan. 2023) - 481.98 dollars/t (44,720 rub./t) - plus 1.25%;
rice January (Jan 2023) - $836.84/t (RUB 77,640/t) - plus 0.77%;
rapeseed (ICE, Jan. 2023) - 666.60 cad/t (45,550 rub./t) - plus 2.57%.

The French grain market changed little on Wednesday. At the end of the trading day, March quotes for milling wheat on the Parisian MATIF exchange remained at the same level - €232.00 per ton (in dollar equivalent they decreased to $249.68). March corn quotes dropped slightly to €201.75 per ton (in dollar equivalent - to $217.12).

On the Paris Exchange (MATIF) on Thursday, quotes for December and March contracts at the closing of trading were:

milling wheat (DCBR 2023) - 249.68 dollars/t (23,170 rubles/t) - minus 0.30%;
corn (mart 2023) - 217.12 dollars/t (20150 rub./t) - minus 0.68%;
sunflower (Dec. on the SAFEX exchange - 9286.00 zar./t (45520 rub./t) minus 0.43%;
sunflower oil (nbr. Rotterdam, bulk FOB) - 965.00 USD/t (89540 RUB/t) 0%.

For reference, exchange rates as of 12/07/2023:
92.7826 rub. = US dollar
100.1353 rub. = Euro
RUB 68.3280 = Canadian dollar
RUB 49.0203 = 10 South African rand