European trade lukewarm about wheat order from Egypt

Players on the American grain exchange see things a bit rosier than their European counterparts. The nearing end of the US government shutdown, which has lasted more than a month, plays a role in this. In terms of price, Europe is somewhat more in favor on the world market. However, a large order of wheat from Egypt did not lead to a revival in European wheat trade. The December contract for wheat on the Matif closed yesterday down €0.75 at €190.75 per tonne. On the CBoT, the grains closed in the green during the last trading session. Wheat noted an increase of 8 cents to $5.35¾ per bushel. Corn closed up 2½ cents at $4.29¾ per bushel. The biggest gainer on the exchange in Chicago was soy with an increase of 14¼ cents to $11.16 per bushel. The fact that there seems to be a quick end in sight for the U.S. government shutdown is one of the factors that contributed to a more positive mood on the Chicago exchange. Seven Democrats and one independent in the U.S. Congress have moved towards the Republicans, creating a majority for the budget proposal and bringing an end to the longest shutdown ever. However, there is still a catch since the current proposal only concerns government spending until January 30. It will also take some time before the House of Representatives and the president grant their approval and for the federal government to be fully operational again. Nevertheless, a Wasde report from the USDA is coming out this Friday evening (Dutch time), the first since September. Traders and analysts also hope to quickly receive figures on U.S. exports. This will validate reports about Chinese purchases of soy and wheat in the U.S. The rising trend of grains on the Chicago exchange has not really followed through in Europe yet. This is despite the fact that European wheat and wheat from the Black Sea region are relatively sharply priced on the world market. A boost in this regard is an order from Egypt. According to various sources, Egypt has purchased 500,000 tonnes of wheat for delivery in December and January. Of the order, 200,000 tonnes will come from Russia and Bulgaria, Romania, and Ukraine will each supply 100,000 tonnes. The Ikar quotation for Russian wheat has risen by $1.50 to $232 per tonne. Ikar expects that Russia will export between 5.2 and 5.4 million tonnes of wheat in November. This puts Ikar slightly above the forecast of SovEcon. The latter expects an export of 4.7 million tonnes for the month of November. In Brazil, farmers are more than halfway through planting the planned soybean area. According to AgRural, 61% of the soybean is in the ground compared to 47% last week. In the largest soybean province, Mato Grosso, 86% has been sown, and thus planting is slightly behind the historical average, reports AgRural. According to the agency, there has been enough early planting to start the soybean harvest in the second half of January. For the soybean sector in the U.S., the news is less favorable. Brazilian soy is already cheaper after the rally of soy on the CBoT, and if the harvest there can indeed start early, the price difference is likely to widen rather than narrow. The fact that China has not yet officially confirmed that it will buy 12 million tonnes of soy in the coming year and 25 million tonnes over the next three years is causing some analysts concern.