European wheat and maize prices continue to rise as concerns about dry weather in Europe mount. The situation in the United States also plays a role, where dry and warm weather also dampens yield expectations for corn and soybeans.
The American stock markets are closed today for a national holiday, but even without American support, the Matif in Paris can continue to rise. On Monday afternoon, a price of €239,25 per ton was quoted for wheat delivery in September. That is almost the same as the price level on May 15, but still below the peak of €243,25 on Friday. The price of grain corn has also risen further, to €238,75 per tonne on Monday afternoon.
Drought in US and EU
The main reason for this increase, which started last week, is concern about crop development in the US and Europe. It remains persistently dry in the American Midwest. This leaves analysts and traders in doubt about the yield expectations that the USDA has taken into account so far. It was (too) wet in Europe for a long time. The winter grains have been able to benefit from this, but it has now also become quite dry in the EU. The latest publication of the Mars bulletin also shows this.
In France - the largest European wheat producer - winter grains have taken full advantage of the season. Sufficient soil moisture and drought around flowering. The winter barley harvest has started cautiously, and the first reports are mixed. Yields in the south of France are quite disappointing due to drought this spring. Areas that received more rain are performing well. This picture is also visible elsewhere in Europe. The first winter barley has also been harvested in the Netherlands.
Worry about spring grains
FranceAgriMer is more concerned about the spring grains. Barley, corn, but also sunflowers. Those crops now need moisture to develop properly. Last week the crop assessment was adjusted downwards, to 85% for wheat. That is three percent lower than the week before, but still a significant improvement on last season.
The government agency also lowered its wheat export forecast in 2023-2024. This now amounts to 10,2 million tons for the EU. That is 16% more than in the current season, but 100.000 tons less than previously thought. The French government thinks there is more competition from grains from the Black Sea region.
Grain deal keeps people busy
Ukraine's exports continue to concern people. That's the other key ingredient in the grain market. The current grain deal is still valid for about a month. Nearly 1000 ships are still booked to leave Ukraine. Good for 32 million tons of agricultural products. More than half of this is corn and a small third is wheat. Russian government officials continue to comment on the non-renewal of the deal, leaving the grain market on edge.
Meanwhile, Ukrainian farmers have also started harvesting winter barley around the port city of Odessa. The sowing campaign is almost over, with 13 million hectares having been sown. With 4 million hectares, grain maize is the largest crop. However, 14% less maize was sown than last year. Less maize has been sown, especially in the center and west of the country, government figures show.
Tenders
In the run-up to the new season, the North African countries are holding tenders for various products, including wheat. Today Algeria held a major tender round for wheat, among other things, with analysts waiting to see what price levels have been subscribed to. Russia still has a huge stock, which it tries to sell on the world market at relatively low prices.
Thunderstorms in Europe are causing a somewhat muted sound on the European grain market. Significant rain has fallen in the north of Germany, which improves the situation locally. Showers have also fallen in France. Friday's bullish mood has therefore not been able to gain any further strength today, but with continued dry and warm weather for the next fourteen days, it will not take long before the bulls come out again. Especially when market movements here are reinforced by American market figures.