European grain does not (yet) suffer from frost

Adverse effects have remained minimal during the cold spell that kept January in its flu, according to the latest crop monitoring by the European Commission. This is evident from the most recent data. The cereal crops were hardened off just in time, so there is no fear of major damage. This means that the message differs slightly from the 'Strategy Grains Report' of mid-January. In that forecast, the European harvest of wheat was reduced from 145 to 143,8 million tons.

Some frost damage is still expected for the west of France, Great Britain and Denmark. Cereal crops in these areas are less hardened off. To do this, the temperature has to drop below zero again. The Commission expects frost until the end of January, but without a major impact. Looking at a forecast for the next three months – if realistic – a warmer-than-average trend is expected.

The situation in Ukraine is the only one to argue with. The report says there has been ample snowfall in nearly all areas and crops have hardened off, however satellite images show widespread thaw in the south of the country, almost completely removing the snow. The temperature drops to -22 degrees Celsius at night, which can certainly cause damage. Central Ukraine and Russia have been treated to a snow cover of 5 to 60 centimeters. However, there is hardly any snow to be found around the southern Russian city of Krasnodar. However, with temperatures as low as -10 there is little fear of wintering.

In Germany, Poland and the Balkans a snow cover can be found between 2 and 20 centimeters. Crops are in hibernation. North of the Danube valley, however, there is hardly any snow, but the temperature has dropped considerably. Cold weather in Northern and Central Europe results in unsettled weather around the Mediterranean. As a result, 25 to 130 millimeters have recently fallen in Spain and Greece, causing considerable damage to agricultural crops.

The USDA also adjusts figures for cereal crops in the US. Cold and dry conditions throughout December have impacted wheat crops growing on the US Plains. Wheat state Oklahoma has only 25 percent of its crops in good or excellent condition. Last year in the same period it was almost 75 percent. Last week in particular, the wheat market in Chicago experienced a small rally, although fears for Trump will be greater than those for wintering.

The Matif in Paris remains extremely stable, listing at 170 euros. Unaffected by the vicissitudes surrounding the winter weather. This may have everything to do with French export figures. For soft wheat, the lowest since 1999. Compared to last year, the export volume has decreased by more than 30 percent. Exports to countries outside the EU decreased by 40 percent, compared to the same period last year. FranceAgriMer puts 2016-17 wheat exports at 4,7 million tons, compared to 8 million tons last season. The country owes this to the worst harvest in thirty years. Excess revenue from 2015 has done little for the export volume.

The CBoT moves its price and reacts in week 3 with a slight upward movement. In Paris, progress is very steady.