Demand from Africa improves sentiment in wheat market

The sentiment in the grain market is somewhat more positive. A new tender from North Africa provides some confidence. The relationship between China and America remains difficult, but there are slightly friendlier signals coming from Japan towards the US. Within the US, there is a lot of discussion among farmers about the USDA support program, which is currently stalled due to the shutdown. According to the Secretary of Agriculture, there is now movement in that regard. The December contract for wheat on the Matif closed yesterday €1.50 higher at €189.75 per ton. Grain prices on the CBoT also finished in the green. Wheat gained 3½ cents to $5.03¾ per bushel. Corn closed up 3¼ cents at $4.23 per bushel. Soybeans also made a slight gain of 4 cents to $10.34¾ per bushel. Market agency Ikar has revised its forecast for the Russian wheat harvest upwards by 0.5 million tons to a total of 88 million tons. According to the agency, wheat yields have turned out higher than initially expected. Ikar has kept the expected wheat export from Russia unchanged at 44.1 million tons. The forecast for the corn harvest has also been revised upwards by Ikar, from 15 to 15.3 million tons. The expected corn export in the new forecasts is also 300,000 tons higher at 4.1 million tons. Low price apparently not the only consideration A tender from Algeria created a somewhat more positive sentiment in the wheat market. After the country recently secured 450,000 tons, it has reportedly purchased another 50,000 tons of wheat. The price is said to be just below $259 C&F (cost and freight), and the wheat is likely coming from the Black Sea region or Argentina. French wheat is relatively cheap on the world market and also affordable for Algeria in terms of transport, but due to diplomatic tensions between Paris and Algiers, Algeria does not want wheat from France. The previous tender also included some wheat from the US, which is also competitively priced. Some analysts find it somewhat remarkable that Algeria has not purchased any wheat from there now. In the US, Trump is once again attracting attention. Whether Trump and Xi will come to an agreement regarding their differences of opinion on trade relations remains a big question mark. In the lead-up to the meeting between both presidents in less than two weeks, the lower echelon will meet first in Malaysia. A boost for the US is, in any case, that the new Prime Minister of Japan may want more soybeans, natural gas, and pickups from America. At least, that is what various news services are reporting. Agriculture prioritized Among American farmers, there is much discussion about the Farmer Aid program, a support program from the federal government that is somewhat comparable to our CAP. Due to the shutdown of the US government, the Department of Agriculture is also running at a low level. The Farm Service Agency (FSA), which is responsible for providing loans to farmers, is completely closed. US Secretary of Agriculture Brooke Rollins indicated that this department will reopen later this week. Rollins stated that payments from certain support programs are crucial for farmers. According to some, the resumption of certain activities at the USDA shows how flexible the White House is in determining which government functions continue to operate during a shutdown to achieve political goals. Meanwhile, President Trump is trying to exert maximum pressure on the Democrats by cutting funding for projects in states that voted for Kamala Harris in the 2024 elections, while he resumes agricultural support and continues to process economic data relevant for calculating the increase in social security benefits for the elderly. Rollins said on Tuesday to Fox Business that $3 billion will be disbursed to farmers and added that the government will soon announce an additional support plan to address the issue that 'China is obstructing our soybean farmers' access to the market'.