Wet autumn and winter cost yields in Germany

The May wheat contract on the Matif closed yesterday €0,75 lower at €194 per tonne. On the CBoT, the May wheat contract lost 2,2% to $5.32¼ per bushel. Corn also took a hit, dropping 1,7% to $4.33¾ per bushel. Soy was flat compared to grains, declining 0,1% to $11.95¼ per bushel.

The news that Chinese importers have canceled or postponed orders for a total of 1 million Australian wheat hit the American stock market particularly hard. Europe will not emerge from the battle unscathed either. After varying reports from France about cancellations, the big word came out yesterday. Adeli Dridi, analyst at FranceAgriMer, told a press conference that China has canceled orders for soft French wheat. He did not reveal details about volumes. The closing stock of wheat has been adjusted upwards by FranceAgriMer to 3,74 million tons. That was 3,5 million tons in last month's forecast. The final stock of barley is 360.000 lower at 1,75 million tons. This is partly due to good demand from China. China buys barley as an alternative to corn. The French closing stock of corn has been increased by FranceAgriMer by 90.000 tons to 2,44 million tons.

Record crop turnout?
The IGC has reduced the harvest forecast for cereals in the 2023/24 season by 6 million tonnes compared to last month. This brings world production to 2304 million. The reduction is mainly the result of poor growing conditions for maize in the Southern Hemisphere, the IGC writes. This month's report contains the first forecast for the 2024/25 season. The total grain harvest is estimated at 2.322 million tons. If realized, this would mean a record harvest. The wheat yield for the coming harvest is estimated at 799 million tons against 789 last harvest. For corn, the yield is estimated at 1.233 million tons compared to 1.227 million tons last harvest.

Land for agriculture
The Deutscher Raiffeisenverband (DRV) published the German acreage forecast yesterday. In the association's estimate, the grain area in Germany falls below 6 million hectares for the first time. "We expect 5,9 million hectares of grain, a new low," writes DRV grain market expert Guido Seedler. The grain yield is forecast at 41 million tons. That is 3,5% lower compared to last season. The rapeseed harvest remains approximately the same as last season at 3,9 million tons. Frost damage has hardly been a problem in Germany, but the wet winter has been even more so. Due to the wet autumn, it has not been possible to sow winter wheat everywhere and due to flooding in the winter, plots will have to be resown, according to DRV. However, the heavy soil in northern Germany is hardly suitable for spring work. The winter wheat area is 7,3% smaller than last season. Instead, more spring wheat is sown. The area of ​​spring wheat has more than doubled to 69.100 hectares. Oats and spring barley also show a small increase in area. Corn is less popular with German arable farmers. In maize, DRV expects an area shrinkage of 5,1%.

In the explanation of the area figures, Seedler strongly criticizes German and European agricultural policy. New construction projects and solar meadows are consuming agricultural land. On top of that, the EU is obliged to leave 4% of the area fallow next season. According to DRV, competition for land will only become worse in the coming years. According to a study by the Thünen Institute, a total of 2030 hectares of agricultural land could be lost by 600.000 as a result of the development or implementation of climate and nature measures (e.g. rewetting peatlands). "That is about 3% of the agricultural area," according to Seedler. As much land as possible must be secured for agriculture according to the DRV. According to Seedler, that is the only way in which Germany can contribute to the world food supply.