Will winter affect the sentiment in the wheat market?

The soybean market does not entirely follow the pattern you might expect. The Chinese customs officially announced that China did not purchase any soybeans from the US in September. Instead, Brazil and Argentina supplied almost all the soybeans. Nevertheless, soybean prices on the CBoT rose, fueled by hopes for a trade agreement between China and the US. In Europe, we could actually see real winter weather in the coming months. It is still some time away, but some weather models indicate an increased likelihood of cold weather due to the weak polar vortex. The December contract for wheat on the Matif closed yesterday €0.75 lower at €188.50 per ton. On the CBoT, wheat closed 1 cent higher at $5.04¾ per bushel. Corn recorded a gain of ¾ cent to $4.23¼ per bushel. Most of the movement on the Chicago exchange during the last trading session was not in grains but in soybeans. Soybeans closed 12¼ cents higher at $10.31¾ per bushel. That soybeans have reached their highest closing price in a month is somewhat remarkable. Figures published by Chinese customs yesterday show that China did not import any soybeans from the US in September for the first time since 2018. Last year, China imported 1.7 million tons of soybeans from the US. Almost all the soybeans that China imported last month came from South America. Brazil accounted for 10.96 million tons, representing 85% of total Chinese imports. In September, Brazil exported 30% more to China than in the same month a year earlier. Argentina saw its soybean exports to China increase by 92% compared to a year ago. In terms of tons, this means 1.17 million tons of soybeans went to China. In total, China imported 12.87 million tons of soybeans in September, making it the second-largest monthly import ever. Hope for an agreement The rise in soybean prices on the CBoT despite the lack of demand from China is largely related to discussions between the US and China regarding trade relations. This week, a meeting is scheduled between US Treasury Secretary Scott Bessent and Chinese Vice Premier He Lifeng in Malaysia. The following week, Trump and Xi will meet in South Korea. The slightly softened tone of US officials fuels hopes that both superpowers can reach a trade agreement. In Brazil, 24% of the planned soybean area has been planted, according to AgRural's figures. Last year at this time, the figure was 18%. And importantly, rain has also fallen in Brazil. Early in the planting season, there was rain, allowing some growers to plant earlier than usual. However, rain has since been absent, causing problems with germination. Some fields that are germinating unevenly may need to be replanted according to some sources, but for the soybeans planted a little later, the rain comes at just the right time. The wheat market remains relatively stable. Ikar raised the price estimate for Russian wheat by $2 to $231 per ton. In Ukraine, wheat exports this season are running 22.6% behind last season. According to the latest figures from Ukraine, 5.68 million tons of wheat had been exported by October 20. Cold arrival? The weather could still cause considerable unrest in the wheat market in the coming months. Although it is still relatively far off, some meteorologists suggest that a weak polar vortex during the December to February period could lead to cold weather in Europe. For Western Europe, it would have to be unusual for this to really lead to winter damage. Besides the unlikeliness of temperatures dropping low enough here, as well as in France or Poland, to cause frost damage, the cold (if it comes) would likely be accompanied by precipitation in the form of snow. For Russia and Kazakhstan, the situation is different. Weather models indicate a colder than average weather pattern for the coming winter, with less precipitation predicted. This is a long-term forecast, with significant caveats involved.