The differences between the grain market in Europe and the US show a completely different picture. Then there is Russia, which, like North America, is heading for an excellent harvest. Now that the European wheat harvest is in its final phase, it is clear that it is a major setback, especially in Western Europe.
More and more harvest numbers are trickling in with a wheat harvest that is largely in the Western European countries. The leading French market agency Stratégie Grains estimates the wheat yield of the EU-27 at 116,5 million tons. A decrease of 5,8 million tons compared to their previous estimate and the smallest harvest since 2018, when 114,8 million tons were threshed. In 2020, also a disappointing year, 118,1 million tons were harvested.
French and German wheat
France's Agreste reduced its harvest by 3,3 million tons to 26,3 million tons. The lowest volume since 1987. 48% of wheat is now rated as good to excellent. Nearly 90% of all wheat has now been harvested in the country and three quarters of spring barley. In Germany, the statistics service came up with 19,7 million tons of wheat. A decrease of 8% compared to last year, when 21,5 million tons were harvested.
In our country too, it is now clear to arable farmers that the 2024 grain harvest will be a major setback. 6 to 7 tons per hectare is normal for this year, partly due to disappointing hectoliter weights. It is also special that the spring wheat harvested so far sometimes performs even better, with yields of up to 9 tons per hectare. They just missed the darkest and wettest weather and did not suffer from a wet winter.
Loss-making
The stock exchange quotations in our country remain fairly stable and increased slightly in week 32. A price level that fluctuates around €200 per ton does not make up for the low yield. Even with a reasonable straw price and perhaps some fertilizer money, grain cultivation is simply making a loss for the arable farmer this year.
Warm and dry summer weather has allowed the grain harvest to proceed smoothly. Especially in the Netherlands, we can talk about a successful harvest. In France and Germany, showers have thrown more of a spanner in the works. The weather does not yet have a major impact on the corn harvest. Stratégie Grains estimates corn yields in the EU-27 at 60 million tons. That is slightly less than was threshed last year, partly due to a smaller area. It is mainly the heat in Eastern Europe that costs yields there.
European prices for wheat and corn in Paris are still feeling the bottom. For wheat it is around €215 per tonne. This will also be dealt with again on Monday afternoon, August 12. Corn is still hovering just above €200 per tonne with a price around €203,50. For wheat, the pressure from cheaper Russian wheat is a factor. In the case of corn, it is the large American harvest that keeps the price level under control.
Record short positions
A good harvest for corn and soybeans is what American farmers are heading for. This results in a market in the US that is clearly bearish. According to figures from Bloomberg, there are a record number of short positions in twenty different commodities, including grains and soybeans. In addition to a large harvest, a strong dollar, less demand from China and the situation on the financial markets play a role.
The Wasde report for August will be published tonight at six o'clock Dutch time. Analysts expect that the US Department of Agriculture will make some adjustments to the corn acreage. In July, the market was surprised by stock figures and an area that was 600.000 hectares larger than previously described. It is possible that this increase will now be countered somewhat. Especially because some corn has been lost in the northwest of the Corn Belt due to heavy rainfall. For the first time this season, the USDA also includes figures provided by farmers themselves.
Export is disappointing
The story was similar for soybeans last month, although the area increased less. The US is heading for the best harvest since 2020. The USDA may adjust yields slightly further. Soybean exports to China remain sluggish. The USDA previously assumed 7% more exports in the coming season, but the question is whether they can stick to that.
With wheat, exports are actually ahead of expectations. The Wasde report does not expect major shifts this time for this crop. It is possible that the area of spring wheat will be corrected slightly upwards. News for wheat may come more from the Russian corner. The USDA currently assumes 83 million tons of wheat from this country. Hot weather has had an impact, but not all market agencies are on board with that. That's why it's interesting which way the Americans go.