Analysis Grains & Commodities
Grain market players are digging in
We are hardly used to it anymore, but it is still possible, a day without major outliers on the grain market. On the one hand, there are the weather reports that put some pressure on prices and, on the other hand, players in the market are concerned about what acreage figures the USDA will release later today. The IGC also came up with new yield figures, but that hardly caused a stir on the market.
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Choose the subscription that suits youThe September contract for wheat on the Matif rebounded yesterday for the first time after the sharp falls earlier this week by €2 to close at €233,25 per tonne. On the CBoT, wheat closed 0,4% lower at $6.53 per bushel. Corn also took a step back on the Chicago stock exchange, falling 1,5% to $5.81 per bushel. Unlike wheat and corn, soy closed in the green last trading session. The July contract gained 2,2% to $14.83 per bushel.
In a nutshell, it was neither roe nor roe in the last trading session on the grain market. In the US, market players have taken positions in the run-up to the acreage and stock figures that the USDA will release later today (Friday, June 30). Various analysts and experts have given their area expectations. Broadly speaking, the USDA expects no major adjustments compared to the acreage figures from March.
Tinkering with harvest expectations
The new harvest estimate from the International Grains Council (IGC) did not stir the market either. For wheat, the ICG assumes a total harvest of 786 million tons. That is 3 million tons more than the previous estimate a month and a half ago, but still well below the 803 million collected in the 2022/23 season. For corn, the harvest forecast has been lowered from 1.217 million tons in May to 1.211 million tons in the forecast published yesterday. The IGC made a small adjustment to soy production and lowered the estimate by 1 million tons to a total harvest of 402 million tons.
Drought, especially in America, is one of the main reasons for the adjustments in harvest expectations. In Argentina, soy in particular has suffered from this and in the US and Canada the yield of all grains is therefore lower. Brazil stands out on the other hand, because sufficient moisture ensures top yields in maize, according to the IGC.
Drought is shifting
Rain is forecast in the US and eastern Canada in the coming days. If that precipitation actually falls in sufficient quantities, corn and soy can benefit greatly from it. However, this is not yet sufficient to immediately solve the drought problems, as shown by the drought monitor published yesterday. The problem is moving. On the southern prairies, the red-colored areas have become smaller, while towards the Midwest the map becomes increasingly darker.
You currently hear little from Europe about yield forecasts or the first harvest results. This week, Ukraine came up with a whole host of conflicting yield expectations, but few official figures have been released from France, for example, about the winter barley that has largely been harvested. Insiders do not dare to make firm statements, but between the lines they do hint that the returns are average to above average. This also applies to Dutch winter barley. Winter barley is generally a reasonable indicator of wheat yield.