Wheat in the US has hardly benefited from the rain that has fallen in recent days. At least that's what the Crop Progress report paints. The state of wheat in the US remains worrying. However, that does not translate into price on the CBoT, where wheat has taken another hit. The starting position is better for maize and soya.
The Matif was closed yesterday for Labor Day. Yesterday was a normal trading day in Chicago. The results were mixed. Wheat took a big hit on the CBoT, closing 2,6% lower at $6.03¾ per bushel. The May corn contract added 0,5% to close at $6.39½ per bushel. The other corn contracts closed slightly lower. Soya was in the plus across the board. The May contract closed 0,7% higher at $14.54¾ per bushel.
According to several analysts, the USDA's Crop Progress report, which was released after the market closed yesterday, contains no major surprises. Winter wheat in the US remains a concern. 42% of the area is in poor or very poor condition. That was still 41% last week. Rain that fell on the southern prairies last week had no effect on the condition of wheat in the important state of Kansas, according to figures from the USDA. On the other hand, 28% of the total area receives a good or excellent rating from the USDA, compared to 26% of the area last week. A quarter of the area is in the ear, which is slightly ahead of the five-year average of 23% for this period. With 12% of the planned area sown, spring wheat sowing is significantly behind the five-year average of 22%. Of the spring wheat in the ground, 2% is at the top. The five-year average is 6%.
The fact that the wheat quotation on the CBoT fell again yesterday is surprising to several analysts. The drought and moderate to poor condition of the crop usually translates into a moderate yield. The current state of durum wheat in the US is worse than in 2006 and 2014, both years that heralded higher grain prices.
The lead in sowing maize is lost
American farmers are making more progress with sowing corn. 26% of the planned area is included and that is equal to the five-year average for this week. The lead compared to the five-year average that was mentioned last week has therefore been lost. Sowing soy is also done according to the book. Of the planned area, 19% has been sown compared to 11% in the five-year average. According to some American media, frost in the Midwest has caused damage to the earliest sown corn and soy. Due to the low soil temperature and rain, sowing has also been postponed by several farmers. This effect was already expected in the Crop Progress report last week, but did not materialize. So now it is visible in the USDA figures. Analysts and traders do not immediately become nervous about this. The structure of the soil is largely good and with favorable weather reports in prospect, significant progress can be made in the coming days, according to some analysts.
It is currently remarkably quiet about developments surrounding the grain deal between Russia and Ukraine. The Ukrainian Ministry of Agriculture released new export figures yesterday. In the 2022/23 season, 1 million tons of grain were exported until May 41,595. The export for the month of April is 3,619 million tons. Last season the export count stood at 45,869 million tons and Ukraine exported 923.000 tons of grain in April.