Cold weather causes logistical problems in Russia

In Russia, it is cold. For the grain market, this is currently mainly causing problems for the transport of grain to export ports, writes market agency Ikar. Damage from winterkill is so far manageable according to the market agency. In the US, however, wheat took a nice hit. This is partly related to broader developments in the financial markets. In Brazil, the soybean harvest is going smoothly. However, AgRural warns that the weather is not ideal for the later soybean fields. The March wheat contract on the Matif closed yesterday €0.75 lower at €193.50 per ton. On the CBoT, wheat closed 10¼ cents lower at $5.27¾ per bushel. Corn also closed lower, but here the loss was limited to 2½ cents to $4.25¾ per bushel. Soybeans lost 4 cents and ended up at $10.60¼ per bushel. The weather premium on wheat is not being built up further. Ikar raised the quote for Russian wheat by $2 to $231 per ton FOB (delivered on board). The higher price is attributed to logistical problems by the market agency. Due to the cold weather in Russia, traders are having difficulty getting wheat from storage at the producers to the ports on the Black Sea. You would expect that this cold would cause damage to the wheat for the upcoming harvest. Some local sources reported last week that due to the lack of snow, winter grains in the southwest of Russia are susceptible to frost damage. According to Ikar, winterkill is not yet an issue. The weather is being closely monitored but has not yet caused significant problems in Russia, according to Ikar. Stronger dollar The weekly export figures for wheat from the USDA were neatly in line with what analysts expected at 12 million bushels (approximately 327,000 tons). In total, the US has exported 613 million bushels (approximately 16.7 million tons) of wheat. This means that exports are 7% ahead of the USDA's forecast for the current season and nearly 100 million bushels (approximately 2.7 million tons) more have been exported compared to the same period last season. Despite the smooth exports, wheat on the CBoT took a hit yesterday. According to some analysts, this is not entirely unrelated to developments in the financial markets. The dollar was on the rise and oil took a step back. Both are factors that dampen sentiment in the grain market. The cold weather in the US is not seen as a major risk for wheat, we can cautiously conclude. Heat In Brazil, the soybean harvest is proceeding without major setbacks so far, according to AgRural. 10% of the soybean area has been harvested compared to 9% last year this week. The market agency notes that we must keep an eye on the weather reports for the southern province of Rio Grande do Sul. Very warm weather is forecasted there, which could affect yields in the late-maturing soybeans. This is also an issue for the late-sown soybeans in the provinces of Parana, Santa Catarina, and the south of Mato Grosso do Sul. The harvest of the first crop of corn is lagging behind last season. 10% of the area has been harvested this season compared to 14% last year this week. The sowing of the follow-up crop of corn is going more smoothly. 13% of the planned area is in the ground compared to 9% last year this week.