Grain prices on the stock exchanges in Paris and Chicago rose for the second day in a row last trading session. On Monday, the market was still mainly under the spell of the export problems in Ukraine. Yesterday it was mainly the weather reports that fueled the bullish momentum in the market.
The September wheat contract on the Matif gained €13,25 last trading session and closed at €344,50 per tonne. Wheat prices on the CBoT rose 4,6% to $8.04,75 per bushel (approximately €291 per tonne). Soy rose 4,1% on the CBoT and corn rose 2,9%.
Hot and dry weather in much of the US is one of the driving forces behind the upward momentum in the grain market. Corn and soy are in a crucial phase for the development of the crop. The weather reports predict even warmer weather for the coming days. Analysts assume that the unfavorable weather conditions will be at the expense of the final yield of these crops.
It is not dry everywhere in the US. On the northern prairies, spring rain delayed the sowing of spring wheat. Now farmers are reaping the benefits of the moisture in the soil. Participants in the Wheat Quality Council Hard Spring Wheat and Durum Tour expect an above-average yield from hard spring wheat. On 120 plots, mainly in North Dakota, that were included in the tests, an average expected yield of 48,9 bushels per acre (approximately 3,3 tons per hectare) was determined. Last year it was 29,5 bushels per acre (approximately 2 tons per hectare). The five-year average stands at 39 bushels per acre (approximately 2,6 tons per hectare).
Drought has wreaked havoc in France
In France, the wheat yield is much lower than last year, but based on the provisional figures, the decline is smaller than previously expected. French market agency Agritel expects a total wheat harvest of 33,44 million tons. That is 5,6% less than the harvest last season. The estimate announced yesterday is therefore marginally higher than the forecast from a week and a half ago when Agritel kept the yield at 33,25 million tons. Due to drought in almost all regions of France, wheat yields are disappointing, according to Agritel. The French Ministry of Agriculture was previously more cautious with the yield forecast. They assume a decrease of 7,2% compared to last year. According to the ministry, this would bring the harvest to 32,9 million tons. Due to drought in almost all regions of France, wheat yields are disappointing, according to Agritel.
The rain of recent days in Europe has offered little relief for transport on the Rhine. Although the water level has risen, it is not enough to allow ships to be fully loaded again, the German Public Works Department (WSA) announced today (Wednesday, July 27). The low water level causes the biggest problems at Kaub (below Koblenz). Depending on the type of ship, it can only be loaded to approximately 50%. This not only causes problems in the grain trade, but also affects the transport of, for example, coal, oil, fertilizer and chemical products.