Moderate wheat levels in the Black Sea region continue to provide a solid base for the wheat market. New figures from Russia and Ukraine gave wheat a boost, especially in Chicago. In corn and soy, the mood was dampened by, among other things, the progress with sowing in the US. Despite the fact that rain falls from time to time, American arable farmers are making steady progress with spring work.
The May wheat contract on the Matif closed yesterday €4,25 lower at €264,75 per tonne. On the CBoT, wheat was on the rise on the first trading day of the week, a long weekend. The July contract closed 0,4% higher at $7.00¼ per bushel. For the first time since the beginning of August last year, the psychological $7 limit has been passed for the current contract. Corn took a step back to close 0,5% lower at $4.62½ a bushel. Soy showed a bigger decline, closing 1,5% lower at $12.29½ per bushel.
Market agency Ikar has once again adjusted the yield forecast downwards. Ikar now assumes a wheat harvest in Russia of 81,5 million tons and an export of 44 million tons. A month ago, the agency still expected 93 million tons, of which 52 million would be exported. Drought and frost have caused considerable damage to Russian winter wheat.
A yield forecast also came from Ukraine. The Ukrainian Grain Sector Association estimates the upcoming harvest of grains and oilseeds at 74,6 million tons against 76,1 million tons in the previous forecast. Last season the harvest amounted to 82,8 million tons. The reason for lowering the harvest forecast is a smaller sown area, unfavorable prices, relatively high transport costs and drought this month in the east and south of the country. In addition to a preview of the coming harvest, export figures also came from Ukraine. The country has exported 27 million tons of grain in the current season through May 45,8. This means that exports are ahead of last season when exports over the same period amounted to 44,9 million tonnes. The export figure this season includes 17 million tons of wheat, 25,8 million tons of corn and 2,4 million tons of barley.
Sowing in the US continues apace
The USDA released the Crop Progress report a day later than usual due to Memorial Day this week. For wheat, the report is slightly bullish. Of the winter wheat area, 48% receives a good or excellent rating, compared to 49% last week. Growth is ahead at 77% in the year compared to 69% in the five-year average. Spring wheat sowing is well underway with 88% of the planned area sown. The five-year average stands at 81% seeded for this week. Rain is forecast in the western part of the wheat belt at the end of this week. If that precipitation falls, it could put pressure on wheat prices, according to analysts. Especially because the upper limit has been extended in recent months.
For Corn and Soy, Crop Progress is Neutral to Bearish. Of the planned corn area, 83% is in the ground. This means that American growers are ahead of the five-year average of 82%, but behind last season when 89% had already been sown this week. Corn growth is in line with the five-year average at 58% above. Last year 66% were above. Of the soy area, 68% has been sown, compared to 63% in the five-year average. Last year, 78% had been sown. 39% of soy is above compared to 36% in the five-year average and 50% last season this week.