Rain in Europe is unevenly distributed. Grain growers in Northwestern Europe are eagerly awaiting a dry period, but every time they get rain. Further east, a shower would be more than welcome. According to the weather reports, it will remain dry there for the next two weeks. This could well influence the amount of grain that can be exported from the Black Sea region for the coming season.
The September wheat contract on the Matif closed €5,50 higher yesterday at €230,25 per tonne. Wheat was also on the rise on the CBoT, rising 2,8% to $5.69¼ per bushel. Corn showed a small recovery after the sharp decline before the weekend, closing 0,3% higher at $3.98¼ per bushel. Soybean closed 0,8% higher at $11.59½ per bushel.
In the Netherlands we have almost forgotten the summer weather of last week. In our part of the world the rain has returned with a vengeance. The only advantage is that part of Spain and western Poland also get a tail end of the rain. They could use some moisture there. In eastern Europe, Ukraine and southern Russia, concerns are increasing about hot and dry weather that continues there. There is little or no rain in the weather reports until mid-July. Several analysts expect that the lack of moisture will cost kilos in grains. It may not be too bad for winter wheat, as that crop is ripening, but summer wheat and corn are expected to take a big hit.
Market hardly reacts
The weather influence is not reflected in the price for Russian wheat. Ikar lowered the Black Sea wheat quote by $5 to $226 per tonne. Despite the lower price, Russian exports took a step back according to SovEcon figures. Russia exported 790.000 tons of grain last week compared to 830.000 tons a week earlier. Of the grain exports last week, 680.000 tons were wheat. For the 2024/25 season, SovEcon has lowered its export forecast by 1,7 million tons to 46,1 million tons. The reason for this is an expected smaller harvest, writes Andrey Sizov, director of the agency, in an email to customers. The smaller harvest could cause prices for grains to rise and increases the chance that Russia will introduce new export restrictions to control prices on the Russian market.
Gait is everything
In the US, wheat growers have given the harvest a big boost. According to this week's Crop Progress report, 54% of winter wheat has been harvested. The five-year average for this week stands at 39%. Some analysts expect that with more than half threshed, the wheat market has reached its provisional low. According to them, supply around the harvest is slowly drying up. On the other hand, there is also a group that expects that we will have another peak of wheat for which there is no room in the silos.
The condition of winter wheat has been adjusted slightly downwards with 51% now receiving a good or excellent rating. That was 52% last week. Spring wheat is actually doing a little better. 72% of the area in the US is in good or excellent condition compared to 71% last week. Corn is down slightly this week with 67% of the acreage receiving good or excellent status compared to 69% last week. Soy has remained the same. Just like last week, 57% received a good or excellent rating.
In Brazil, the harvest of successive maize crops is almost half completed. AgRural writes that 49% has been threshed. StoneX yesterday lowered its corn yield forecast in Brazil. The agency now expects a total corn harvest of 121,18 million tons. That was 121,75 million tons in the previous forecast. For comparison, the USDA estimated 122 million tons in the last Wasde report.