Import provides ample European wheat supplies

The September wheat contract on the Matif closed yesterday €4,75 lower at €258,50 tonnes. On the CBoT, wheat also retreated, closing 1,7% lower at $6.81 per bushel. Corn showed a similar move, losing 1,4% to $4.48¾ per bushel. Soy moved more sideways, losing 0,4%. That brought the closing price to $12.09¾ per bushel.

The European Commission yesterday released a new yield forecast. The wheat harvest is estimated at 120,2 million tons. That is the same as the previous prediction. The harvest would therefore be 4% smaller than last season and the smallest since 2020/21. The European final stock of wheat for the 2024/25 season will be adjusted upwards from 12,2 to 13,5 million tons. This is due to a larger than expected final stock for the current season of 21,4 instead of 20,4 million tons, which is in turn a result of larger imports.

Technical failure
It is almost shocking, but the Commission provided updated export figures for the first time since May 3. Due to technical problems, we had to do without the normal weekly figures for three weeks. The total import of wheat this season is 8,7 million against 8,4 million tons in the same period last season. With 6,2 million tons, Ukraine accounts for more than 70% of all EU wheat imports. European wheat exports are lagging behind compared to last season. In 2023/24, 27,8 million tons were exported compared to 29,0 million tons last season.

There was more news from Europe. The Commission presented a new sanctions package against Russia and Belarus. An import tax will be imposed from July 1 on grains, oilseeds and derived products such as scrap and flour. A ban on grain imports is a break from previous sanctions packages, from which food was always excluded. The basic principle was that food should under no circumstances become a weapon in war. The EU's measures are somewhat reminiscent of symbolic politics. This season, the EU imported 340.000 tons of wheat and, according to the USDA, Russian exports amounted to 53,5 million tons.

Drought
The weather is and remains one of the most important factors for the mood on the grain market. It is dry in the Black Sea region. That will change in the coming days if we can believe the weather reports. That would be just in time for the region's winter wheat to be well advanced in its growth stage. It is also dry on the southern prairies in the US, the new drought monitor shows. The weather forecasters expect scattered showers here. Whether the winter grains will help is doubted by several local sources. The combines are already moving in south Texas. They are moving further north almost every day. Wheat in northern Texas and eastern Kansas and Oklahoma is almost ripe. Rain does more harm than good at such an advanced stage, from declining hectoliter weights to an increasing risk of mold formation.