Autumn grain market looks set to heat up

The grain market is being supported by geopolitical tensions. American attempts to get Ukraine and Russia to the table have had little success, as the Russian missile attack on Kyiv last night once again shows. The fact that there is also unrest in the Middle East is not without consequences for the grain market. The September wheat contract on the Matif closed yesterday €0.50 higher at €241 per tonne. The December contract, which is where most trading takes place, gained €3 to €249.25 per tonne. The Chicago exchange was closed yesterday because of Labor Day in the US. Last weekend, the American envoys Steve Witkoff and Jared Kushner were in Russia and Ukraine to talk about an end to the war. Witkoff reports on X that progress was made during his visits to Moscow and Kyiv. The Kremlin described the talks between the US and Russia as 'constructive and candid'. According to Zelensky, 'the Russians are ready to negotiate', he told news site Axios yesterday. Ukraine and Russia had a ceasefire for the past three days in connection with the American attempt to mediate. That brief truce ended last night. After it expired, Russia carried out an attack on Kyiv in which, according to various sources, two people were killed and seven were injured. Some analysts doubt whether there is a good chance that Russia and Ukraine will soon reach peace. Especially now that infrastructure and shipping are being targeted, it is quite conceivable that this will continue to create a steady underlying tone in the grain market. Fuel prices up What also does not help is the unrest in the Middle East. Last weekend, hardly any ships passed through the Strait of Hormuz. That mainly has a price-raising effect on fuel and fertilizer. A rising fertilizer price is not the biggest problem at this time of year, but expensive fuel does hurt agriculture during the harvest of later crops and other autumn work. That problem is further reinforced by disappointing crop yields in Europe after the various warm periods we have had. Warm late summer Here it feels autumnal today, but in parts of the US growers are still dealing with a warm spell. As a result, the ripening of corn and soybeans is progressing rapidly according to some local sources. However, differences between fields are large. The corn sown in April in states such as Illinois and Iowa is ready to be harvested, American media report. Because of the warm weather, disease pressure in the US is high. That will no longer cause much yield loss in a field that is far advanced in ripening. Certain fungi can, however, affect the strength of the stem and thereby cause lodging in corn and soybeans.