Analysis Grains & Commodities
Wheat prices are falling just as easily again
Russia caused a rally in the wheat market at the end of May. Concerns about frost and drought have subsided again and analysts now name Russia as a major cause of the decline in the futures markets. In addition, there is also some harvest pressure from the US, where the wheat harvest is picking up steam early. Corn and soy are on the rise despite a good starting position for these crops in the US.
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The September contract for wheat on the Matif closed yesterday €4,75 lower at €239 per tonne. Wheat also took a hit on the CBoT, closing 3,2% lower at $6.07½ per bushel. Corn and soy were on the rise on the Chicago stock exchange last trading session. Corn closed 0,7% higher at $4.51¾ a bushel. Soy showed a similar move, gaining 0,8% to $11.88¼ per bushel.
Russia put pressure on the wheat market. Ikar's Russian Black Sea wheat price fell $6 to $242 per tonne. Russia exported 1,36 million tons of grain last week, according to SovEcon data. That is 80.000 tons more than a week earlier. With 1,2 million tons, wheat is by far the most important product in Russian grain exports. Rain is forecast in the Black Sea region for later this week. According to analysts, a third to a half of the wheat in the Black Sea region could benefit from the rainfall.
APK-Inform estimates the Ukrainian grain harvest for the coming season at 52,76 million tons. That is 12% less than the 2023 harvest and in line with the forecast of the Ukrainian Ministry of Agriculture, which expects a harvest of 52,4 million tons. According to APK-Inform, Ukraine will harvest 19,99 million tons of wheat, 26,77 tons of corn and 4,51 tons of barley in the coming harvest. Grain exports for the 2024/25 season (which runs from July 1 to June 30) are estimated at 36,16 million tons. Ukraine is expected to export 49,02 million tons in the current season.
Wheat crop gains momentum
In the US, the harvest is putting some pressure on the wheat market. According to this week's Crop Progress report, 12% of wheat acreage has been threshed. The leader is Oklahoma, where 48% of winter wheat has been harvested, closely followed by Texas with 47% harvested. In the largest wheat state, Kansas, 5% has been harvested. Sufficiently dry weather is forecast over the next ten days to allow threshing to progress further in Kansas. The condition of winter wheat in the US has deteriorated somewhat this week. 47% of the area receives a good or excellent rating compared to 49% last week. The sowing of spring wheat is almost complete with 98% sown. The condition of spring wheat has also deteriorated slightly with 72% of the area being good or excellent compared to 74% last week. Last year, only 60% of the spring wheat area received the status of good or excellent.
Three quarters of the corn is in good condition
Just like spring wheat, sowing maize is in the final stages. 95% of the planned area has been sown. That is equal to the five-year average, but last year this week 98% had been sown. Growth is slightly ahead of the multi-year average with 85% of the area above compared to 84% in the five-year average. Last year, 91% were above this week. The condition of maize has lost 1 percentage point and 74% of the area is now in good or excellent condition.
The planned soy area is 87% sown compared to 84% in the five-year average and 95% last season. 70% of the soy is now at the top. This week, for the first time this season, the condition of soy has also been included in the Crop Progress report. 72% receive a good or excellent rating from the USDA.