Grains on the grill in Europe and US

On Friday 10 June, the September contract on the Matif already closed €5,50 per tonne higher, at €391,75, after the announcement of the Was thereport for June. The contract is also positive again on Monday 13 June. In the afternoon the price moves around €395 per tonne, peaking at €399,50. The CME in Chicago is also in the green.

Heat in Europe, US and India are all impacting wheat pricing. Especially in Spain and France, high temperatures are expected this week thanks to hot air from North Africa. On the European continent, values ​​between 40 and 45 degrees are therefore possible. This is especially the case in the south of France, part of which also moves further north. At the end of the week, the thermometer can also touch 30 degrees in the Netherlands.

Heat wave never before so early
Temperatures are exceptionally high, especially for this time of year. Records can be broken in both countries. Current weather forecasts suggest that the heat could last for five to seven days. If this becomes a reality, it will be the earliest heat wave ever in France that is likely to reach 40 degrees. At the end of the week, the heat could spread more to Central Europe, affecting Germany and Poland, among others. But that is largely coffee grounds watching. The weather models are currently not counting on extreme weather to follow after the heat.

In France, winter barley has been harvested in the south of the country since 1 June. Yields are below average due to drought this season. The Ministry of Agriculture estimates them at 6,5 tons per hectare, compared to 6,85 tons last year. The area of ​​winter barley has increased by 5,7% this year in the country to 1,27 million hectares. This compensates for the lower yield. Most barley is grown in central France. There was rain at the beginning of June, but in many cases not enough. It remains to be seen how the yields move there.

Heat in US arable areas
The central and eastern US is also experiencing a heat wave this week, centered on key arable regions. It also warns of local tornadoes, hailstorms and heavy precipitation. Also in the far north, where the spring was very wet, the heat is now hitting, which is not positive for the already not ideal crop development.

When it became apparent in mid-May that India can export considerably less wheat as a result of a dry growing season, the wheat price straight away. In Europe, the prices soared with almost 6% rise. The country is in the news again today. In the Wasde report, the USDA estimates India's export potential at 6,5 million tons. That is 2 million tons less than previously thought.

Russia expects big harvest
The USDA remains positive about the export possibilities of Russia – where the signals for a large grain harvest are still green. The current figure stands at 40 million tons of wheat for the 2022/2023 season, which is 7 million tons more than last season. The second highest volume ever. At the same time, the Ukrainian volume of wheat is falling by a third, the Americans report. The big bottleneck here is exporting this grain, for which there is still no solution. There is also no simple one for this problematic issue, despite previous reports that Russia would be willing to reopen the export routes. A short-term solution is not expected by participants in the grain market. The price rose last week even after a rocket attack was carried out on a grain terminal. Wheat, maize and sunflower seed is exported via alternative routes through Romania, Poland and Spain.

20% not sown in Ukraine
The first winter barley is now being harvested around the port city of Odessa, while the grain silos are far from empty. Corn in particular is still in storage. The spring sowing was completed in early June. Regional government figures show that a fifth less has been sown than in 2021. In total, this concerns 2,75 million hectares less spring crops. The area of ​​winter cereals is 300.000 hectares smaller than last year. However, considerably more rapeseed has been sown.