Decreasing demand from beer brewers and a sharp increase in barley acreage are unfavorable for the malting barley market. Higher consumption offers only partial solace. The wheat market has entered a phase of the selling season where the futures market has become a real weather market.
Closing catering establishments and festivals not only has a huge impact on the chip market. Beer consumption has also been significantly reduced. A decline that is not offset by higher supermarket sales. Market analysts therefore expect malting barley prices to fall, because brewers have less need for barley.
Larger harvest expected
This is unwelcome news, because a lot of summer barley has been sown throughout Europe this spring after a wet winter. However, this barley is now often found in a dry and cloddy seedbed. In addition, sowing was done relatively late. It is unclear what this will do for the 2020-21 market season, but with a normal harvest, brewing premiums will come under pressure.
The Matif in Paris was not listed on Monday April 13 due to Easter. The CBoT in Chicago did this, remaining stable at $203,93 per tonne (-$0,55). Corn also remained stable, soy fell $3,4 per tonne.
Frost in USA
The US wheat price initially rose on Monday. In the southern part of the 'Plains' the mercury fell below 0, causing fears of frost damage. A larger wheat harvest and ending inventory, expected by the US Agriculture Department (USDA), ultimately suppressed a price increase. According to the USDA, 62% of U.S. wheat crops are now in good condition. That is 2% more than a year earlier and a higher percentage than shown in recent years. The winter wheats are slightly less developed.
Frost is expected again in Nebraska and Kansas, which may affect yields. Spring wheat sowing is slightly slower than in 2019, especially in Canada and the northern part of the US, where it is still persistently wet.
Drought in Europe
Coincidentally, the French market agency FranceAgriMer allocates the same percentage to wheat crops in their country. That is still considerably less than the 83% of a year earlier, due to a wet autumn and winter. It is now persistently dry in Western Europe. In our country too, the ongoing rainfall deficit - which has been monitored since April 1 - has again shown a sharp increase.
Ukrainian wheat harvest
It has also been very dry in the Black Sea region, which is so important for wheat, since last autumn. Reason for analyst firm APK-Inform to adjust their forecasts for the Ukrainian wheat harvest downwards by 2,9 million tons, to 72,2 million tons. The southern part of Russia also remains very dry, which is why there continues to be talk in the market about a smaller harvest.
American exporters have been able to do good business on the wheat front in the sale and shipping of hard red wheat (HRW). Today – Tuesday, April 14 – the Egyptian state agency GASC is launching a new wheat tender. The market is watching the results with great interest to see which destinations may be experiencing export problems now that ports cannot operate at full speed.