Dip in dry bulk grain prices attracts buyers

The dip in Chicago wheat prices, which reached its nadir on Cyber Monday, has attracted shoppers, notably Chinese ones.

The US Department of Agriculture (USDA) has announced Chinese purchases of 1.0 million t of US soft red winter wheat, the biggest such purchase since 2020.

With soft red winter wheat being the type traded in Chicago, futures there have soared. Gains for December have reached 6%, with the rebound since Cyber Monday (27 November) above 10% (at least, before the USDA’s Wasde report). Still, other markets have not followed Chicago’s lead, with European prices barely moving in dollar terms since Cyber Monday.

But then, EU wheat is still struggling when it comes to the export business, a shortfall which Egypt’s Gasc underlined at two tenders, buying a total of 600 000 t, but all of Black Sea origin (540 000 t from Russia and 60 000 t from Ukraine). There has been talk of China delaying imports of French wheat on order.

London wheat, meanwhile, has remained insulated from trade-related volatility by its reduced need for exports, following a disappointing 2023 harvest, and with a poor outlook for the 2024 harvest season thanks to a rain disruptions to the autumn sowings window.

Other factors included the short-covering by funds which is one of the key themes examined in CRM Agri’s Weekly Grain Outlook.

Read the article online at: https://www.drybulkmagazine.com/dry-bulk/08122023/dip-in-dry-bulk-grain-prices-attracts-buyers/