A strong price rally for wheat also affects the prices of grain maize and soybeans. The former in particular is showing a revival. Another factor is the difficult sowing in the United States. It is quiet on the European continent for the time being.
While the September contract for wheat on the Matif peaks at €439,75 per tonne, corn is also making significant gains. This crop still has two contract periods (June and August) to go before the new harvest in Paris. The June contract opened on Monday morning, May 16, at €373 per tonne. This is €12,75 higher than the closing price of Friday, May 13. The new harvest is also positive. The November contract opened at €380,25 per tonne. An increase of €18,50.
Maximum price increase
Already in overnight trading, the CBoT reached the maximum price increase of 5% for wheat. After that, the market is frozen and no more trading can take place for that day. The European futures market does not have such an instrument. Corn is up 2,88% for the old harvest. The new harvest gained 2,4%. At midday, the July contract is trading at $7,96 per bushel and the September contract is trading at $7,66 per bushel.
In the American 'cornbeltThe optimal sowing time is between April 20 and May 15. That deadline has now passed. A wet and very cold spring means that the sowing machines only get started late. Sowing after mid-May is fine, but it does cost yield. On Monday evening Dutch time, the USDA will release new figures about sowing. One week ago, 22% of the corn was in the ground, while on average half has already been sown.
Winter wheat poor in United States
12% of the soy had been sown, compared to an average of 25%. The sowing of spring wheat is also lagging behind. In winter wheat, 33% is now in the ear, while 40% is average. Only 20% of winter wheat in the United States is rated "good to excellent." As many as 39% are 'poor to very poor'. The average is 50% 'good to excellent' and 18% 'poor to very poor'. Especially in the southern states such as Texas, it is extremely dry and the wheat is in poor condition.
Despite a very difficult season in Ukraine, the crops are in good shape, according to market agency APK-Inform. The weather conditions have been good with sufficient precipitation. The sowing of spring crops is almost complete. There are no official figures, but it is estimated that 20% to 30% less has been sown. Especially in the south and east of the country. Arable farmers have also sown other crops. More oats, for example, and less corn, because this crop requires fewer inputs.
Ukraine harvest halved
There are also no official figures regarding the yield. Estimates are flying all over the place. With the above-mentioned decrease in area, the grain harvest this season could reach 41,4 million tons, analysts believe. Last year a record amount of 86 million tons was harvested. New figures from the US Department of Agriculture put the corn harvest at 19,5 million tonnes, compared to 42,1 million tonnes last year. The export expectation goes from 23 million tons to only 9 million tons. For wheat, the USDA estimates 21,5 million tons, compared to 33 million tons last year. Exports are 9 million tons lower, at 10 million tons.
Expectations are very good for Russia, although the question remains how the country can export the grains and which countries are in the queue. The latter is probably not really a problem. For example, ally China, but also Iran, announced last week that it would like to receive Russian products.
Less corn, more soy
Figures from the corn market provided results Wasde-report last Thursday (May 12) for some surprise. The US Department of Agriculture now expects 367,3 million tons of corn to be harvested. A decrease of 16,6 million tons compared to the previous estimate. The closing stock also decreases. Estimated soy stocks are also declining. A record volume of 126,3 million tons is expected for the coming harvest. A season earlier that was still 120,7 million tons. Soy is popular this year because the crop requires much less nitrogen than corn.
Showers in the Midwest mean that the corn market in the United States has not yet taken any major steps. The sowing figures are also not awaited. If it is disappointing today, just like the precipitation, then it is a real one bull market and can take new steps in the direction. With that, a lot depends on it Crop Progressreport this week. Even if half or more of all corn appears to have been sown, market sentiment will not immediately change. This is partly due to the lower yield figures in the Wasde report. There is no such fear with soy, because this crop can easily be sown later without yield losses.
Less corn in France
Last week, the French agriculture ministry announced that around 1,37 million hectares of grain maize have been sown. That is more than 6% less than in 2021. According to the ministry, arable farmers have often chosen to grow other crops because of the high costs. For example, the area of sunflowers increased by 8,5% to 758.000 hectares. Drought is becoming an increasing problem in France, but it is currently a problem mainly for winter grains and sugar beets.