Grain market moves after Trump statement on China

Wheat does not really have the wind in its sails on the futures markets. Developments in the Middle East are now putting a bit of a brake on the market. There is also little support coming from the condition of wheat in Europe. That is different in other parts of the world. Drought in the US is well known, but now there are also reports from Australia where the new season is starting very dry. A message from Donald Trump about the Strait of Hormuz and China caused quite a stir in soybeans. The May contract for wheat on the Matif closed yesterday €1.25 lower at €194.25 per tonne. On the CBoT wheat moved up a bit and closed 1¾ cent higher at $5.93¾ per bushel. Corn was stronger in the last trading session and gained 8¼ cent to $4.51¼ per bushel. Soybeans closed 9 cent higher at $11.67 per bushel. With a message on his own social media channel Truth Social, US president Donald Trump caused some optimism in the soy market. According to Trump, China is very happy that he is reopening the Strait of Hormuz. According to the US president, China has promised in return not to supply weapons to Iran. Trump is counting on a 'big fat hug' from Chinese leader Xi when they meet each other in a few weeks. That feeds the idea that China could import large volumes of soybeans from the US in the coming period. Still, there are various analysts who question that. Brazil has had a good harvest and is moreover also cheaper with soybeans than the US. A buying wave from China for soybeans from the old crop from the US is reasonably not logical. More soybeans harvested in Brazil Conab is raising the forecast for the Brazilian soybean harvest from 177.85 million tonnes to 179.15 million tonnes, according to the institute that falls under the Brazilian Ministry of Agriculture. That is very close to the Bloomberg poll, in which analysts were counting on a harvest estimate of 179 tonnes. Conab is raising the forecast for corn by 1.3 million tonnes to 139.6 million tonnes. China does not only import soybeans from the American continent. The Russian press agency Interfax reports that Russia exported 120,000 tonnes of soybeans to China in March. That is the largest monthly export since December 2023, writes Interfax. On the total volume of 4 million tons of soybeans that China imported in March according to Chinese customs, Russia's share is not that significant. The Russian Ministry of Agriculture reports that the winter crops in Russia are looking good. 97% of the crops are in 'good and satisfactory' condition, the Tass press agency quotes Russian Minister of Agriculture Oksana Lut as saying. Start in Ukraine In Ukraine, a good start has meanwhile been made with sowing the spring crops. 17% of the planned area of spring grains and pulses is in the ground, UkrAgroConsult reports based on figures from the Ukrainian Ministry of Economic Affairs. With 128,500 hectares, 69% of the planned area is in the ground. Ukrainian arable farmers are furthest along with peas, of which 209,800 hectares or 76% of the planned area has been sown. With corn only a start has been made. Only 100 hectares of that have been sown. The chance of peace in the Middle East is being priced in a bit more by the market. Oil is of course the first thing where that stands out. Yet according to various analysts, the same applies to wheat. Various sources also mention the relatively favorable growing season so far in Europe. Of course, there are some problems with drought, especially in eastern Europe, and waterlogging in the southwest, but overall wheat is doing quite well in the EU. Dry start In Australia, the new growing season for winter grains is starting less favorably. Some rain has fallen in the north and the far south of the country, but in most of the country it is dry. That is favorable for the progress of sowing winter wheat and rapeseed, but absolutely not for the early development of the crops. Combine that with high fuel and fertilizer prices and a possible development of El Niño (the weather phenomenon that usually means drought in Australia) and farmers could sow less than expected, according to various local sources.