The U.S. Department of Agriculture is shelling out to support farmers affected by the trade war with China. This news is causing price pressure on the grain market. In addition, it is especially exciting how the sowing of grains in the United States will end.
The US Department of Agriculture has said the government is making about $16 billion available to help farmers affected by the trade war with China. Emergency aid totaled $12 billion last year. The package of measures is seen by the grain trade as an incentive for farmers to sow more, despite the bad weather conditions.
Large part of maize not sown
The quotations on the CBoT declined as a result of this announcement. This decline followed a sharp rise earlier in the week. The increases were caused by poor weather conditions in key production areas, where it is particularly wet. This means that the sowing is far behind. It is even reported that as many as 2 million hectares of maize cannot be sown.
In addition, wet weather in the Northern Plains has hampered spring wheat sowing, while heavy rain in the Southern Plains has created uncertainty about winter wheat damage. These matters caused the wheat price to climb to its highest level in 3 months, closing it at $175 per tonne. The quotation for maize is $155 per tonne.
Pressure on soy price
As far as soybeans are concerned, lasting pressure on the price is expected. As the season progresses, American farmers are more likely to sow more acres of soybeans (at the expense of corn). This is unfortunate, because soy stocks are already quite large. This is because exports to China have largely stopped.
The news of the delay in sowing in the United States also has an impact on the European grain market. For example, the wheat quotation on the Matif in Paris (delivery September) rose by €3,75 per tonne to €176,25 per tonne.