No major fluctuations in grain prices last trading session, but that does not mean that calm has returned to the market. The weather remains the major uncertain factor. Yesterday there was a drought in Russia that made the news again. The Russian ministry also took a swipe at Europe. Corn is doing well in the US, according to the Crop Progress report. The start of the wheat harvest in the US is putting some pressure on the market.
The September contract for wheat on the Matif closed yesterday €0,50 lower at €258,75 per tonne. On the CBoT, wheat lost 0,8% to $6.72¾ per bushel. Corn closed 0,6% lower to $4.43½ per bushel. Soy was the biggest decliner with 1,7% to $11.84½ per bushel.
At first glance it looks like a lukewarm trading day that we have had, but appearances can be deceiving according to some analysts. The weather caused some underlying concerns. Warm and dry weather is forecast for southern Russia, eastern Ukraine and western Kazakhstan. In central Europe, the weather reports are heavy showers that may cause damage to crops.
Russia is considering declaring a national state of emergency at the end of this week due to frost damage, according to Russian Agriculture Minister Oksana Lut, the Russian state news agency Ria writes. The state of emergency would pave the way for insurance claims by agricultural companies. Several regions have already declared a local state of emergency. Lut does not yet want to attach specific amounts to the damage caused by the frost last month. Last week, the Russian Union of Grain Traders talked about 1,5 million hectares that had suffered damage to a greater or lesser extent. The Russian Ministry of Agriculture also announced via Russian media that they are not very concerned about the EU's higher import tariffs. There are sufficient other markets to export to, according to the ministry.
Jumping start of corn
Corn planting in the US has come a long way, according to the USDA's Crop Progress report. Of the planned corn area, 91% is in the ground. The five-year average for this week is 89%, but last year 95% was already sown. 74% of the corn is above, which is slightly above the five-year average of 73%. This week the corn status was also included for the first time. 75% are good or excellent compared to 64% last year. The planned soy area is 78% sown compared to 73% in the five-year average and 89% last season. More than half, namely 55% of the soy is at the top. Last year this week it was 69%.
Winter wheat in the US is slightly better than last week. 49% of the area is in good or excellent condition compared to 48% last week. Last season, only 36% received a good or excellent rating. Of the spring wheat area, 74% receives a good or excellent rating. That was 64% last season. The harvest of winter wheat has now started in the US. 6% of the area has been threshed compared to 3% last year this week. In Texas the harvest has progressed furthest with 33% combined. According to several analysts, the decline in wheat on the CBoT is related to the start of the harvest. The supply of wheat that is sold immediately is also putting some pressure on the futures market.
Good prospects for Australian wheat
The Australian economic institute Abares yesterday released a new yield forecast. For the 2024/25 season, Aberas expects an Australian wheat harvest of 29,1 million tonnes. That is 12% more than last season and 10% above the five-year average. The rapeseed harvest is estimated to be lower, up to 5,4 million tons. That is 5% less than last season, but 21% above the ten-year average.
In Europe, rapeseed is suffering from the wet weather. Strategy Grains has lowered the harvest forecast for the EU by 180.000 tonnes to 17,9 million tonnes. If realized, the harvest will be 10% smaller than last season, mainly due to water damage in France and frost damage in central Europe. The expected harvest for sunflowers in the EU has been reduced by 30.000 tonnes to 10,7 million tonnes. According to Strategy Grains, the yield of soy is also lower and goes from 3,11 million tons to 3,06 million tons.