The grain market took another step up in the past trading session. Developments around the Black Sea continue to play a major role in the wheat market. In maize and soya, international trade is mainly focused on drought in the US. But also in Europe the growing season is anything but plain sailing
The September wheat contract closed yesterday at €341,25 per tonne on the Matif. That is €1,25 higher compared to the day before. On the CBoT, the wheat price rose even more strongly. There, the September contract rose 3,5% to $8,17 per bushel (approximately €294 per tonne). Corn and soy also closed higher on the American stock market.
The increase in the wheat price is largely due to the uncertainty surrounding the export of Ukrainian wheat. Last week, Russia, Ukraine, Turkey and the UN signed an agreement to restart exports via the Black Sea. Top UN diplomat Martin Griffiths said he was hopeful that the first shipments of grain could leave Ukraine on Friday. He added that a safe route around the sea mines still needs to be developed.
The Ukrainian Committee of Grain Traders (UGA) announced yesterday that Ukraine has threshed 11,8 million tons of grain so far. 8 million tons of wheat have been harvested, giving an average yield of 3,52 tons per hectare. For barley, the counter stands at 3,5 million tons, resulting in an average yield of 3,26 tons per hectare. The rapeseed harvest amounts to 1,7 million tons with an average yield of 2,52 tons per hectare. The total Ukrainian harvest of grains and oilseeds was estimated by the government earlier this year at 50 million tons. By comparison, last year Ukrainian farmers harvested a record harvest of 86 tons. Due to the war, the cultivated area has shrunk by 25% this year compared to last year. Due to the smaller harvest, grain exports of 30 million tons are expected for the 2022/2023 season.
Early and disappointing harvest
The harvest of wheat and barley has been completed in Hungary, the Ministry of Agriculture reports. Due to drought and heat, the harvest was completed very early, according to the ministry. The yield of winter wheat is approximately 25% lower than last year. This year, 3,9 million wheat have been harvested. Last year that was 5,3 million tons. Due to the persistent drought, corn and sunflower yields are also at risk, according to the ministry.
In France the wheat and barley harvest is almost over. On average, according to market agency FranceAgriMer, 5% of the soft wheat area still needs to be harvested and 8% of the (summer) barley. The durum wheat is almost entirely indoors.
In the corn trade, attention is mainly focused on the dry and warm conditions in the US. But the weather in Europe is also not helping to achieve top yields. Market agency Stratégie Grains this month lowered the EU forecast for grain maize from 66,8 million tonnes in the June forecast to 65,4 million tonnes this month. In France, the EU's largest corn producer, yields are likely to be lower than the five-year average of 13,2 million tonnes. In parts of Southern Europe, growers had to deal with extremely high temperatures earlier this month. And drought is also affecting European farmers. In France, approximately 35% of the corn area can be irrigated. Due to the dry spring and summer, water levels in various regions have dropped to such an extent that irrigation bans have been imposed. This July will probably be the driest in France since 1959, according to the meteorological service Meteo France.