While Europe and the Black Sea region compete in the wheat market, the harvest in the southern hemisphere is picking up steam. In Australia, the harvest rate is increasing rapidly and a lot of wheat has also been harvested in Argentina. What does this mean for the market?
The cooperative grain trading company CBH Group has now received 3,3 million tons of grain. The amount of wheat and barley is split 50/50. In western Australia the harvest is in full swing due to more favorable weather. Locally, farmers have to stop because the risk of forest fires due to the heat and strong winds is too great: 1 spark from an exhaust can have disastrous consequences for a large area.
Disappointing yield
CBH, which receives almost all the wheat in this part of the country, received 1 tons in one day. According to the insiders, the returns are disappointing in many places. Arable farmers are therefore very reluctant to sell and first want to know how big the harvest is. The country is particularly focused on Southeast Asia and the Middle East. There is more demand for rapeseed from Europe. Traders expect the country to export between 330.000 million and 6 million tons of soft wheat this season.
The wheat harvest has also started in Argentina. 13% has now been received. The most recent estimates indicate a harvest that is 300.000 tons lower than previously thought (18,5 million tons). Despite reductions, it remains a relatively large volume, which is put on the market at very low prices.
Europe is doing good business
Despite an aggressive sales policy, the European Union is doing good business. The volume of wheat is almost 50% higher than last year: 11,6 million tons. This is the largest volume exported since 2014. Ukraine and Russia remain cautious. Exports there are actually lagging behind. It ensures that prices remain stable, without major breakouts up or down. This suits the time of year.
United States hopeful
The United States continues to disappoint with its wheat exports, where the CBoT was also significantly lower. The soy market is particularly affected by the difficult trade negotiations. It is still not clear how China and the Americans will settle their dispute, which makes the market uncertain. However, it provides a positive basis, which is supported by high figures in export and processing. These are at a 'pre-trade war level'.
The Americans look askance at the corn harvest, which is currently far from ready. Winter weather has ensured that harvesting could take place under good conditions. However, rising temperatures and snow are throwing a spanner in the works in some states.