Warnings of lower yields in Europe and the Americas push grain prices back up again. On the Matif, wheat from the new crop closed above €400 per tonne for the first time. In addition, traders and speculators are taking their positions in the run-up to the Wasde report that will be published tonight Dutch time.
The September wheat contract on the Matif closed yesterday (May 11) €7,25 higher at €403,25 per tonne. The quotation for the 2022 harvest has therefore passed the €400 per tonne mark for the first time. The other contracts for 'harvest 2022' are also increasing. The May 2023 contract is quoted the lowest, at €389,75 per tonne. That is still a plus of 1,6% compared to one day earlier. The technical analysis indicates that there is still room for a higher wheat price. The next resistance level is at €500 per tonne, while the price finds support at €400 and €370 per tonne.
On the CBoT in Chicago, wheat quotations also started to rise. July contact rose 2% to $1.113 per bushel. This translates to approximately €392 per tonne. Soy and corn prices rose by 0,9% and 1,7% respectively on the CBoT. The driving force behind the higher prices are setbacks in the growing season in various parts of the world. For example, market agency FranceAgriMer yesterday lowered the export forecast for French soft wheat to countries outside the European Union and increased the closing stock to 3,22 million tons.
At the same time, analysts from the French market agency warned of the consequences of the drought in France. Precipitation will have to fall quickly to prevent damage and lower yields of grains from the upcoming harvest.
Another La Niña?
De Rosario Grains Exchange Argentina's wheat harvest is expected to reach 2022 million tons in the 2023/19 growing season. That is significantly lower than the 22,1 million tons harvested last season. The lower yield is largely due to a decreased acreage. Argentine farmers are now starting to sow winter wheat, but due to the La Niña weather phenomenon, several parts of the country are experiencing severe drought. There is talk of a good chance (70%) that La Niña will also continue this summer period. That would be the third year in a row.
In the United States, experts are increasingly taking into account that the slow start of corn sowing will have consequences for the yield of the crop. The backlog is now so great that in large parts of the Midwest the corn is no longer in the ground before the optimal sowing date (mid-May). Experts draw comparisons with 2013, when the season also started late. A cold spring was then followed by a dry summer with relatively low yields. This year too, the patterns hint at drought in June and July.
Despite a start with bumps, which means that top yields are unlikely, it is of course still too early to make reliable statements about the corn yield, several analysts add.