SovEcon: Russian and global grain market news – February 9, 2024

Daily news and market insights from a leading firm focused on the Black Sea grain markets research

Grain prices saw a downturn on Thursday. The March SRW wheat contract closed at $5.88/bu ($216/mt; -2.3% compared to Wednesday). Euronext wheat prices dropped to €205.25/mt ($221/mt; -1.8%), setting a new contract low of €204.25/mt ($220/mt) during a session. U.S. corn fell to $4.34/bu ($171/mt; -1.0%).

Following the USDA’s February WASDE report, U.S. grain prices were under pressure. The agency raised its estimates for ending stocks of U.S. wheat and corn by 0.3 MMT to 17.9 and 55.2 MMT, respectively. Analysts had anticipated wheat stocks would remain at the January forecast level, and corn stocks would decrease by 0.4 MMT.

The USDA expects a reduction in global grain stocks. Year-end global corn stocks are estimated at 322.1 MMT, down from 325.2 MMT last month and below the 324.0 MMT anticipated by analysts; global wheat stocks are projected at 259.4 MMT, down from 260.0 MMT last month and analysts’ expectations of 260.5 MMT.

The USDA has lowered its corn production forecast for Brazil by 3 MMT to 124 MMT, marginally below analysts’ expectations. The production estimate for Argentina remains at 55.0 MMT, despite analysts’ projections for an increase. Additionally, corn crop conditions in Argentina have decreased to average levels amid recent droughts, with 85% of crops rated as normal to excellent, aligning with the average but above last year’s 66%.

The critical period for Argentina’s corn crops is nearing an end, thanks to the onset of rains in the country’s southeast. The country is expected to receive an average of 35-50 mm of precipitation in the upcoming week, with some regions possibly getting up to 80 mm.

Due to adverse weather, Conab has revised Brazil’s corn production forecast down by 3.9 MMT to 113.7 MMT.

The Indian government has reduced the allowable wheat stock holdings for traders to 500 tons from 1,000 tons in an effort to increase grain availability and control price increases.

The Russian United Nations envoy, Gennady Gatilov, has indicated that Russia and the UN may convene this month to discuss the export of Russian agricultural products and fertilizers.

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