Things seem to be finally getting dry in our part of the world. That will be a welcome change for grain growers who have been plagued by rain for virtually the entire growing season. In the Black Sea region, concerns about warm and especially dry weather are increasing. Crops have already been hit and things are not getting any better. In the US they are struggling with flooding in the north. Further south, the winter wheat harvest continues as usual.
The Matif fell to its lowest point in a month and a half. The September contract for wheat on the Matif closed €2,25 lower yesterday at €222,25 per tonne. Grains also closed lower on the CBoT. Wheat lost 1,6% to close at $5.52½ per bushel. Corn moved a bit more sideways, closing 0,3% lower at $4.33½ per bushel. Soy recorded a plus of 1,3% to $11.75¼ per bushel.
The weather in Europe finally seems to be turning in favor of winter grain growers. Temperatures are rising and more importantly we are finally getting a dry period according to the weather forecasters. The JRC, the scientific office of the European Commission, estimates the European wheat yield at 5,64 tons per hectare in the June edition of the Mars bulletin that was released yesterday. That is equal to the five-year average but 1% below the May forecast.
Russia continues to stunt on wheat prices
In Russia, the wheat price remains under pressure. The Ikar quotation for Russian wheat has been reduced by $3 to $231 per tonne. Exports last week were 830.000 tons, according to SovEcon data. That was 800.000 tons a week earlier. While grain growers in Western Europe are happy that it finally seems to be drying out, in the Black Sea region there are concerns about the hot and dry weather. In the south of Russia there was little moisture left in the soil and the warm weather that is forecast may just give the grains the final push. Also in southern Ukraine, only 1% to 20% of the normal rainfall amount for this period has fallen from May 50. Drought inhibits the growth of winter grains, but completely affects summer grains, which therefore have a bad start.
Flying speed
In the US, the winter wheat harvest is moving along at a rapid pace, according to this week's Crop Progress report. 40% of the area was threshed in the week ending June 23. Last week 27% had been harvested. The five-year average for this week is 25% and last year around this time only 21% had been harvested. The condition of the winter wheat has improved slightly. 52% of the area is now in good or excellent condition according to the USDA, compared to 49% last week. The condition of spring wheat has actually deteriorated. 71% of the area now receives a good or excellent rating, compared to 76% last week. Last year this week, only 50% received the good or excellent status.
Corn and soy also declined this week. 69% of corn is in good or excellent condition according to the USDA compared to 72% last week. For soy this is 67% this week compared to 70% last week. The growth of both crops is slightly ahead of last season. 4% of the corn enters the panicle compared to 3% last season and 8% of the soy blooms compared to 6% last season.
Extreme rain has caused enormous local damage in the north of the Corn Belt. River levels have risen, especially in the states of Iowa and North Dakota, causing them to overflow their banks. It is still difficult to determine the extent of the damage to agriculture in the area, but it is certain that crops have also been drowned, according to local media.