In the Netherlands and a large part of Europe we may be waiting for a period of drier weather. Players in the grain market responded to rain in the weather reports last trading session. Rain has fallen in the Black Sea region, reducing drought stress in grains and in the US warm, dry weather in the corn belt is not continuing. That put pressure on prices across the board.
The September contract for wheat on the Matif closed €6,50 lower yesterday at €230,25 per tonne. That is the lowest close in six weeks. On the CBoT, wheat also took a beating, falling to a two-month low. The July contract on the US exchange closed 3,5% lower at $5.91½ per bushel. Corn also closed in the red, losing 1,4% to settle at $4.43¾ per bushel. Soy closed 1,9% lower at $11.57¾ per bushel.
Reports from Russia are putting pressure on the wheat market. Russian exporters are again cheating on prices. Ikar lowered the quote for Russian Black Sea wheat by $8 to $234 per tonne. According to SoveEcon, Russia exported 4,4 million tons of wheat in May compared to 4,6 million tons in April.
Is the rain coming too late?
Rain has also fallen in the Black Sea region in recent days. According to private agencies, only 25% of the wheat in southern Russia is now suffering from drought stress. Experts do not entirely agree on whether grains can benefit from the rain. The harvest is already approaching in the southernmost regions and rain during ripening generally has no beneficial effect on the quality of the wheat and has only a limited effect on the final yield.
Much more winter wheat has already been harvested in the US than analysts expected. The USDA's Crop Progress report shows that 27% of the area has been threshed. Last year this week it was 13% and the five-year average is 14% harvested. The furthest advanced in threshing are farmers in Oklahoma, where 83% have been harvested. In the largest wheat state, Kansas, 28% has been threshed. The condition of the winter wheat, which is still stable, has improved slightly. 49% of the area in the US is in good or excellent condition according to the USDA. That was 47% last week. For spring wheat, 76% of the area receives a good or excellent rating. The relatively good condition of the wheat, but especially the high pace of harvesting, is putting pressure on the American wheat market, according to analysts.
Corn and soy are declining slightly
Almost all of the corn is in the ground. This week there is no more planting progress for this crop in the Crop Progress report. The corn situation has declined slightly, according to the USDA. 72% of the area is in good or excellent condition compared to 74% last week. Soybean sowing is in the final stages. 93% of the planned area is in the ground compared to 93% in the five-year average. Last season this week, 97% of the soy had been sown. Just like corn, the condition of soy has deteriorated somewhat. 70% is good or excellent compared to 70% last week.
According to analysts, the fact that corn and soy were under pressure last trading session has more to do with the weather reports than with the figures from the USDA. The warm, dry weather that was predicted for the Corn Belt will not materialize after all. Instead, there will be showers and it will remain a bit cooler. This is beneficial for the growth of corn and soy.