Andrey Sizov
06.08.2024
On Monday, U.S. grain prices plummeted amid market panic but recovered by the end of the last trading session. The December SRW wheat contract closed at $5.63/bushel ($207/mt; +0.2% compared to Friday). HRW wheat in Kansas rose to $5.77/bushel ($212/mt; +0.1%). The September U.S. corn contract closed at $4.07/bushel ($160/mt; +0.9%). The September Euronext wheat contract closed at €223.25/mt ($245/mt; -1.2%).
Andrey Sizov, SovEcon: "The sharp spike in market volatility and falling stocks likely led to forced liquidation of speculative funds' positions in agricultural commodities. By the end of the day, they had repurchased several thousand wheat and corn contracts. Consequently, both markets closed higher after a significant drop during the night session. The decline in Euronext wheat was partially bought back, but prices remained under pressure due to the strengthening euro against the dollar."
The U.S. dollar index fell to 102.7 on Monday (-0.5% compared to Friday).
U.S. corn sales exceeded market expectations. Last week, 1.21 million metric tons were shipped from the U.S. compared to an estimate of 0.70-1.20 million metric tons.
The share of U.S. corn crops in good to excellent condition decreased by 1 pp. compared to last week, reaching 67% as of August 4, according to the USDA. The share of wheat crops in similar condition remained unchanged at 74%.
Over the weekend, 10-30 mm of rainfall was recorded in the central and eastern parts of the Pampas region in Argentina, reported the Rosario Exchange. Analysts at the exchange noted that the timely rainfall will help alleviate the moisture deficit accumulated during the record dry weather in July.
In July, the Food and Agriculture Organization of the United Nations (FAO) raised its forecast for global grain production in 2024/25 by 7.9 million metric tons to 2.854 billion metric tons, reflecting improved crop prospects. The forecast for global grain exports remained unchanged at 481 million metric tons.
