Inside: Grains & Raw Material
Grain prices rise due to late spring
Late spring makes the commodities market in the United States (US) move. The sowing is behind the 5-year average and especially the futures contracts for maize and wheat benefit from this. Prices are also moving in Europe.
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Choose the subscription that suits youThe US Department of Agriculture (USDA) published figures on the progress of the spring work on April 30. 17% of all grain maize is now in the ground, while the 5-year average is 27%. Last year on the same date, 32% was in the ground. A lot of work has been done in 1 week, although there are states too where nothing has been sown.
Sowing delayed
Arable farmers are currently focusing on sowing their corn. It's early enough for soy. About 5% of the area is in the ground, which is average, but slightly more is sown in the Midwest. The sowing of spring wheat is lagging behind; 10% has been sown, compared to a multi-year average of 36%.
Winter wheat conditions have improved slightly due to recent rainfall. The USDA classifies 33% in good to excellent condition. However, last year more than half of all winter wheat was in good condition (37% is poor to very poor, compared to 13% last year). The drought has permanently scarred wheat crops in the southern Midwest.
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The price of corn reached a closing price on April 30 that was last seen in June 2016.
Corn price to new heights
The May corn contract closed April 30 at a level of $154,52 per ton ($3,93 per bushel). In the afternoon hours, the contract briefly touched $4,03 per bushel, the highest level since August 2017. The closing price is the highest in a long time; At the beginning of July 2017, the price level was 10 cents lower. For a price above $154,52 we have to go back to June 2016.
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Wheat prices in Chicago are rising. This level was last reached at the end of July 2017.
The contract for wheat also continues to rise. It closed Monday, April 30, at $188,31 per ton ($5,13 per bushel). Such prices were last seen in mid-July 2017. Rising prices in the US are also noticeable on the Paris futures market. Wheat closed April 30 at €168,25 per tonne, slightly above the level of early April. This level was last reached in week 31 of 2017 (end of July). Maize closed at €165,50, ending the month as it started.
Rain expected
Rain is expected in the US, which could dampen the mood on the American stock market. However, it does not involve large quantities. The sowing season can be fine without precipitation, but this is good news for wheat. However, the extreme drought, which has lasted for 6 months, cannot be reversed. It is also dry in Russia and Ukraine. It speeds up work in the field, but can slow crop growth in the long term.