Winter weather and harvesting go hand in hand in the grain market

The wintry weather in America and to a slightly lesser extent Russia caused a surge in wheat prices on the Chicago exchange last week. It always takes some time before frost damage in grains becomes visible. Coupled with the significant amounts of snow that have fallen in the US, it is reasonable to conclude that the market took a step back yesterday. A little further south, in Brazil, it is not the winter but the harvest work that captures attention. The harvesting of soybeans is slightly ahead of last year while the corn is lagging behind. The March contract for wheat on the Matif closed €2 lower at €189 per tonne. On the CBoT, wheat also closed lower with a drop of 7 cents to $5.22½ per bushel. Corn lost 2¼ cents and settled at $4.28¼ per bushel. Soybeans followed the same trend as the grains and recorded a decrease of 6 cents to $10.61¾ per bushel. The weather gained some traction last week, especially in the US grain market. The concerns over the cold gripping a large part of the US are not really escalating. In Kansas, the largest winter wheat state in the US, about 5 to 7.5 centimeters of snow fell last weekend. As a result, the winter wheat is fairly protected against the harsh to very harsh frost. In places where there is less snow, frost damage cannot be ruled out, but it will take a few weeks before it becomes clear where the wheat has survived the winter, various analysts state. The snow has another advantage for wheat in the southern prairies. It is dry in the southern US, as the drought monitor from last week shows. The snow also naturally brings moisture. Russian wheat slightly more expensive SovEcon released the export forecast for wheat from Russia yesterday. The agency estimates that Russia will export 3 million tonnes of wheat in January. In December, 4.2 million tonnes crossed the border, while in January last year, the export was limited to 2.2 million tonnes. The price for Russian wheat has risen by $1.50 compared to last week to $229 per tonne FOB (delivered on the ship), writes market agency Ikar. The second week in a row with bad weather in the Black Sea region is providing support to the market, according to analysts. Ukraine is also struggling somewhat with wheat exports. This season, the country has exported 8.37 million tonnes of wheat so far. A year earlier, the count was at 10.61 million tonnes of wheat. Nearly 5% of Brazilian soybeans and corn harvested In Brazil, there are no wintry issues like in America and the Black Sea region. The combines are working on the soybeans there. AgRural reports that 4.9% of the soybean area in Brazil has been harvested. Last year at this time, the count was at 3.9% harvested, and last week 2% of the Brazilian soybeans were harvested, according to AgRural data. Compared to the previous forecast from December, AgRural has adjusted the yield estimate upwards by 600,000 tonnes to 181 million tonnes. The corn harvest is progressing slightly slower compared to last year. 5% of the corn has been harvested compared to 8.6% last year at this time. The total corn harvest (first crop and second crop) is estimated by AgRural at 136.6 million tonnes. The planting of the second crop corn is ahead of last season. Of the planned area, 4.7% has been sown compared to 2.2% last year.