Grain prices were on the rise in both Europe and America last trading session. The wrangling around the export of grain from Ukraine naturally plays an important role in this. But the market also received support from the USDA's Crop Progress report. Wheat remains a concern in the US, but corn is also in the spotlight of analysts and traders.
The grain market took a big step higher last trading session. The May wheat contract on the Matif closed €6 higher compared to the weekend closing price of €256 per tonne. On the CBoT, the May wheat contract rose 2,1% to $6.96½ per bushel. Corn and soy were also on the rise on the American stock market. Corn rose 1,5% to $676½ per bushel and soy closed 1,1% higher at $15.17 per bushel.
Developments surrounding grain exports from Ukraine pushed prices up, according to analysts. Poland, Hungary and Slovakia are taking measures against grain imports from Ukraine to protect their own farmers, against the wishes of Brussels. According to data from the Ukrainian Ministry of Agriculture, approximately 17 million tons of grain have been exported by rail and road through Europe since the Russian invasion more than a year ago.
The uncertainty about the export of grain from Ukraine is further fueled by Russia, which has strong objections to extending the grain deal after mid-May. The export of grain via the Black Sea is even more important for Ukraine than via the mainland routes. By comparison, more than 40 million tons of grain have been exported through the ports since the outbreak of the war. Ukrainian farmers are being squeezed when it comes to grain exports. Kiev is trying to put pressure on Poland in particular, but it is a fine line to balance on. Warsaw is one of the leaders in the EU when it comes to humanitarian and military support to Ukraine.
Slow start spring wheat
The grain market also received support from the USDA's Crop Progress report. No major changes have been made to winter wheat in the US, but what has been adjusted is causing a stir among analysts. 27% of the winter wheat area in the US receives the status of good or excellent, which is the same as last week. The percentage that has a poor or very poor rating has increased by 2 percentage points to 39%, a relatively high percentage that has not occurred for more than 25 years. The important wheat states of Kansas, Oklahoma and Texas particularly stand out. More than half of the winter wheat there is in poor or very poor condition. Things are not going very well with the sowing of spring wheat either. In the six states where almost all spring wheat in the US is grown, 3% of the planned area has been sown. The five-year average for this week is 7% and in Minnesota and North Dakota no start has been made on spring wheat at all.
Too wet to sow corn
Corn planting in the US is also slower than analysts expected. According to the USDA, 8% of the planned area is in the ground, while the trade expected 10%. The five-year average for this week is 5%, so you cannot say that the Americans are behind with the spring work. With soy, American farmers are also ahead of other years. 4% of the planned area has been sown against 1% in the five-year average.
In addition to the Crop Progress report, the USDA also released export figures. Corn exports provided a surprise. Analysts expected exports somewhere between 300.000 and 725.000 tons, but actual exports came in at just over 1,2 million tons. This brings total US corn exports to 21,4 million tons so far this season. This means that total exports are more than 35% behind last season. The weather reports in the US are also slightly less favorable for corn growers at the moment. Rain has fallen in large parts of the Midwest in recent days and solid dry weather is not in the XNUMX-day forecast. Various analysts therefore assume that the sowing of corn will be delayed in the coming days and/or weeks.