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Grain Markets: Rally in MATIF Wheat

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European Grain Markets

  • The MATIF wheat front futures rallied yesterday and is back above the 20-day average. The session started strongly after news of a cargo ship hitting a sea mine in the Black Sea, near the border between Romania and Ukraine. The cause of the explosion has not yet been confirmed.
  • Corn followed wheat’s move in correlation and positioned near previous session levels.
  • Canola futures in Paris rose for another session testing the 450 EUR/tonne resistance and closed above the 100-day average. The high oil price is definitely having an impact, although it seems to be delayed.

American Grain Markets

  • U.S. wheat markets were mixed yesterday as participants continued to weigh pressure from the ongoing harvest, ample supplies and news from the Black Sea. Wheat rose in the Chicago exchanges, fell in Kansas and was unchanged in Minneapolis.
  • CBOT corn was up on one hand due to regional rainfall that may slow harvest in the Corn Belt, on the other hand declining ethanol production.
  • Soybeans rallied slightly yesterday after trading in negative territory for an extended period. Support came from rising soybean meal prices, while a decline in soybean oil capped the rise.

Black Sea Grain Markets

  • It seems the Russian government is still trying to dictate prices. All Russian bids in the Egyptian auction yesterday were at $270/t, which is the recommended price. The lowest bid in the auction was from Bildcom with Bulgarian wheat at $258.77/t FOB $5 cheaper than the August bid. French and Romanian bids were at $260.9/t and $261.05/t respectively. There was also an offer from Ukraine at $280/t.
  • Eventually, after negotiations, Egypt settled on 2 cargos of 60Kmt of Romanian wheat at a price of $255.91/t FOB or $272/t CFR

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