Wheat in the US is not well prepared for cold

There is talk about peace between Russia and Ukraine, but it is still not very concrete. This became apparent yesterday after a visit from Zelensky to Trump. The attacks between Ukraine and Russia on ships and port infrastructure have had some effect on the grain market in the meantime. The weather is another factor that plays a role. After a relatively mild Christmas in the US, real cold may now be approaching in the US. The March wheat contract on the Matif closed €1.25 higher during the last trading session, at €190.25 per ton. On the CBoT, wheat closed 2¾ cents lower at $5.19 per bushel. Corn also took a step back and closed 1 cent lower at $4.50 per bushel. Like the grains, soybeans were also in the red and lost 4½ cents to a closing price of $10.58¾ per bushel. The Ukrainian President Zelensky was in Florida this past weekend with US President Trump. Both men are optimistic about an agreement that would end the war in Ukraine. According to Zelensky, security guarantees are the key to lasting peace. No concrete statements were made about what those guarantees will look like. The other major point of contention remains the Donbas. Russia claims the entire zone in eastern Ukraine, including the areas that are not occupied. Zelensky now seems willing to discuss a demilitarized zone in the Donbas. Prior to Zelensky's visit, Trump had a phone conversation with Putin. All in all, a peace deal in the Black Sea region remains quite vague. New quota The export targets of Russia are concrete. Moscow announced the export quotas last week for the final part of the ongoing export season. From February 15 to June 30, 20 million tons of grain can be exported. Last season, the quota for this period was set at 10.6 million tons. It should be noted that corn and barley were not included under this quota last year but are included this season. Russia aims to export 53 to 55 million tons of grain this season. The Russian grain export has been moderate this season so far. Margins are thin due to low global grain prices and a stronger ruble. The export of wheat, the main grain product, is progressing slowly. Exports in the first months of the season are about 30% lower than last year. Russia hopes that grain exports will pick up as prices on the global market rise again. Grain prices on the world market have risen slightly this month as Russia and Ukraine have attacked each other's ships and port infrastructure. This has caused significant unrest regarding supply security and risks related to grain exports from the Black Sea region. Cold is approaching The weather is another factor that may cause some unrest in the grain market in the coming days. According to weather models, cold air is expected to enter the EU and the Black Sea region in early January. The wheat will not immediately suffer from winterkill, especially in areas where there is snow. However, further in Russia, frost damage is something to consider according to some sources. Cold is also something that analysts in America are concerned about. Last week, record high temperatures were measured in the US. Now there is a cold front over Canada. If this cold front moves further south into the American prairies, it could cause damage. Due to the relatively warm weather of the past week, the wheat is sensitive to winterkill according to several local sources.