Tensions in the Black Sea region are rising further due to the recent Russian missile attacks on Ukraine. However, the grain market has only responded to this to a limited extent. Favorable conditions for the harvest of winter wheat in southern Russia and on the US prairies are gaining traction on the market. The USDA also contributed with the new Crop Progress report.
The September contract for wheat on the Matif closed yesterday €7 lower at €221,25 per tonne. Wheat also suffered a slump on the CBoT, closing 3,4% lower at $5.53 per bushel. Corn fell even further last trading session by 3,8%. The closing price was $3.95¾ per bushel. In soy, the loss was limited to 1,2% to $11.74¼ per bushel.
In the Netherlands we have a burst of summer weather today before new showers arrive, but in other parts of the world dry weather is in the forecast. This is especially noticeable on the wheat market. It will remain dry in Russia for the next two weeks. Ideal conditions for the harvest of winter wheat. The price for Russian Black Sea wheat is therefore under pressure. Ikar lowered the quote by $10 to $216 per ton FOB (delivered to the ship). Sometimes there is extra supply from farmers and cooperatives who offer the last leftovers from the silos of the previous harvest and sometimes business is done with the new harvest.
The market is not reacting very well to Russia's attacks, which included hitting a children's hospital in Kiev. This is increasing tension in the Black Sea region, but according to several analysts, the good yield expectations for grains in the US are more important for traders.
Combines keep the momentum going
The weather is also helping the wheat harvest in the US. The combine caravan is not slowing down yet when we look at this week's Crop Progress report. 63% of the winter wheat area has been threshed, reasonably in line with expectations. The five-year average for this week is 52% harvested. Last season, this week the counter stood at 43%. In the largest wheat state, Kansas, 92% of the winter wheat has been harvested. Further north, in Montana, winter wheat has not yet been harvested, according to the USDA. A very small start has been made in Idaho and Washington with 1% and 2% harvested respectively. The condition of spring wheat has improved according to the USDA. This week, 75% received a good or excellent rating compared to 72% last week.
The status of maize has also improved somewhat this week with 68% good or excellent compared to 67% last week. Growth is ahead of the five-year average. 24% of the corn is in the panicle compared to 14% in the five-year average. There is still some information available from local sources about the status of the corn. The showers last week certainly did some good to the crop. Unfortunately, this is not the case everywhere. There are also reports of significant hail damage.
Soya is not lagging behind maize and spring wheat and here too the condition of the crop has improved. 68% of the area receives a good or excellent rating compared to 67% last week and 55% this week last year. Growth is also slightly ahead of the five-year average with 34% of the crop in flower this season compared to 28% on average. Pods are already being formed on 9% of the area.