We have had a difficult day at the grain market. The so-called Crop Progress report from the United States Department of Agriculture (USDA) contained fairly bullish news for the grain market, as did the weather reports. From Ukraine, the market was tempered somewhat. China released new soybean import figures. There is a certain strategy involved.
The September wheat contract on the Matif closed yesterday €3,75 lower at €229,25 per tonne. The wheat price was also under pressure on the CBoT. Wheat in Chicago lost 2,3% to close at $5.99¼ per bushel. Corn showed a similar decline, closing 2,1% lower at $4.69¼ per bushel. As has often been the case in recent days, soy is the exception and increased 0,5% to $13.70 per bushel.
In this week's Crop Progress report, which was published yesterday by the USDA, quite significant adjustments have been made to the status of summer grains, contrary to analysts' expectations. Of the spring wheat area, 38% received a good or excellent rating this week, compared to 42% last week. In 2022, 64% of the area received the status of good or excellent in this week. Spring barley has also deteriorated considerably: 49% of the area is in good or excellent condition, compared to 54% last week. The summer grain harvest is lagging behind the five-year average. 39% of the spring wheat has been harvested and 49% of the spring barley area has been harvested. Last year, 46% of the spring wheat and 52% of the spring barley had been threshed in this week. The USDA has made minor adjustments in corn and soy. 58% of the corn area is rated good or excellent, compared to 59% last week. The condition of soy has been kept the same at 59% good or excellent.
The weather in the US is not cooperating at the moment. Large parts of the wheat and corn belt are experiencing high temperatures and drought. According to weather forecasts, this may not change until the end of this week at the earliest. Particularly in the case of soy, the drought this week could have significant consequences for the final yield of the crop.
World Trade
Ukraine has exported around 2023 million tons of grain so far in the 24/3,6 season, the Ukrainian Ministry of Agriculture announced yesterday. This includes 1,7 million tons of corn, 1,5 million tons of wheat and 422.000 tons of barley. Furthermore, the ministry announced that it is working on a new safe route for the transport of grain across the Black Sea. Discussions about this would be held with insurers including Lloyd's of London.
China has a new 'main supplier' of soy, or so it seems in the new import figures that the country published last weekend. US imports in July fell 63% compared to the same month a year earlier, while 32% more soy was imported from Brazil. This is not entirely illogical, since Brazil harvested a top harvest of the oil-bearing crop earlier this year. Prices are therefore at a lower level in Brazil compared to the US. Yet you don't really hear American soy exporters complaining. The USDA yesterday announced an order for 159.000 tons to an unknown buyer.