Abundant rainfall in the United States (US) is hampering soy and maize crops. The Midwest region is experiencing the third wettest September since 2. Quality problems are also on the horizon.
The 2 wettest years were 2016 and 2017, which means that it has been very wet for 3 years in a row. Many crops in the US (including Kansas, Missouri, Iowa and Illinois) have been flooded with rain in the past 2 weeks. In the past 14 days, no less than 16 times the normal amount of precipitation fell.
floods
Due to the extreme rainfall, several rivers, such as the Missouri and the Mississippi (including small tributaries) have flooded. Although precipitation should stop in the coming days, the harvest of many crops has been delayed.
The harvest of various crops was ahead of other years. The corn harvest was already 34% ready, while the 5-year average at this time of year is 26%. The soybean harvest was 32%, while the 5-year average is 26%. However, the momentum has now slowed down for a while (with this precipitation).
Quality problems
The rain also causes yield reduction and quality problems. For example, the prolonged wet period ensures that the soybeans germinate in the hull. In addition, there is also talk of germinating maize.
Despite the crop setbacks, soy and corn prices at the CBoT in Chicago are falling rapidly. Due to a large supply of soybeans in the US, the market is under pressure. Most of this has to be exported to Europe, because nothing goes to China due to the trade war.
The corn quotation is also at a significantly low level on the Matif in Paris. With a quotation of €173,50 per tonne, the lowest level in 10 weeks was reached.
Wheat market is wait-and-see
While the US is very wet, the Northern Hemisphere is still experiencing dry weather conditions. The drought there is detrimental to the sowing of winter wheat. The wheat market is also awaiting the WASE report, which will be presented on Thursday, October 11.
The price for wheat has been quite stable since August. The market is currently kept in balance by opposing elements. On the one hand, Russia has increased expectations for grain production (+1 million tons to 106 million tons) and on the other hand, international demand is still very strong.