While Europe is suffering from a heat wave, the situation in the United States is very different. The sowing of the last maize and soya is delayed there due to excessive precipitation. The crops that are already above are affected by flooding. The wheat harvest is also hampered by the weather.
The United States Department of Agriculture (USDA) published the first crop assessment for soy on Monday, June 24. This resulted in a score of 52% good/excellent, which is the lowest percentage since the start in 1992. The assessment for corn goes from 59% in week 25 to 56% in week 26. According to the USDA, 96% of all corn and 85% of all soy are now in the ground.
Sow well later
Sowing is therefore lagging behind in previous years. Normally all the corn is already in the ground, as well as about 97% of the soy. In addition, not all of the crops are at the top yet. It remains extremely wet, especially in the Midwest, which also hinders the wheat harvest in the southern United States. This is now 15% complete, while that figure has been 5% in the past 34 years.
As a result of these figures, commodity markets in Chicago moved on Monday June 24 higher. The ministry will publish the first figures regarding the actual sown area of grains on Friday, June 28. Analysts therefore expect a somewhat nervous character on the futures market in the coming days while they take their positions. However, insiders think that the figures are rosier than the actual situation.
For example, Bloomberg writes about 35,2 million hectares of corn, while Reuters is currently at 35,07 million hectares. In March, the USDA expected 37,55 million hectares. It is almost a certainty that the area will be significantly lower.
What does the yield do?
The heavy precipitation and hail storms have severely damaged crops in the United States, although drier weather is forecast for the next 2 weeks. The question is whether the current corn stock is sufficient to absorb the loss in production. Positive figures regarding harvest and export come from South America. In Ukraine, the sowing of spring crops has been completed. The area of corn remains the same and that of soy has increased by 12% compared to last year. That is less than previously thought.
The American market and the international grain market are currently trying to get a good picture. There is often the opinion that USDA figures do not portray reality. The growing season has started far from ideally and has even been disastrous in a number of areas. The upcoming figures were collected at the beginning of June, so they do not provide a complete picture.
Uncertain market
The main question now is to what extent emergence and growth are hampered by the rain and late start. This undoubtedly has an effect on the yield, but it is difficult to say exactly how much. That uncertainty is felt by the market.