While we had to deal with a sharp night frost in Europe, it was very different in the United States. Up to 40 centimeters of snow fell there. It further threatens spring sowing.
Farms in the Midwest are still clearing rubble as a huge area was hit hard by flooding. At the beginning of April, some states were again hit by a 'bomb cyclone' blizzard, causing heavy snowfall.
Persistent winter weather
It keeps freezing and snowing in the American states, the Dakotas in particular had to bear the brunt. The winter weather is also causing a lot of disruption in Nebraska and Minnesota, forcing grain giant Cargill to close some storage and transshipment locations. Arable farmers are mainly hindered because they are now unable to transport grains, while livestock farmers fear for their livestock.
The persistent frost and snow delay the sowing of spring grains and corn; in any case, the preparatory work cannot take place. As a result, Chicago's CBoT for corn opened higher on Monday, April 15. Wheat actually opened slightly lower. The USDA (the American Department of Agriculture) will provide new figures regarding the progress of sowing.
Proceeds from South America
What further dampens the markets is the global availability of the grains. Expectations for the Argentine soybean harvest have been corrected upwards: to 55 million tons. The Brazilian statistics agency Conab also expects more soy and corn to be harvested. In India, average 'monsoon rainfall' is used, which is positive for the development of the grain.
Drought in Europe
In Europe the situation can still change. After a period of frost, the temperature rises considerably towards Easter, with little to no precipitation throughout Europe. Last autumn, sowing was carried out under extremely dry conditions, as a result of which several plots are hollow and suffer from bifurcation. After a dry winter, the grain crops have difficulty developing properly.
As a result, the French market agency Strategy Grains has slightly lowered its yield forecast. However, partly due to a larger acreage, the current expectation is still 15% above the 2018 harvest. Less barley is also expected. State agency FranceAgriMer has published the wheat crop status as slightly less rosy. Warmer weather is working in favor of the corn crops.
Increase coming?
As also in the cereal flash of Monday April 15, more is needed to send the grain market up. The Matif in Paris remains stable for wheat. If the noise about the drought continues to grow, an increase is inevitable.