Wheat yields are not only disappointing in the EU. In Russia, farmers are threshing more than 20% less wheat compared to last season. In the futures markets, it seems, little attention is paid to the disappointing returns and more attention is paid to the limited demand. The wheat market was also looking for solid ground again yesterday. Corn and soy were on the rise at the Chicago stock exchange. This is partly due to a favorable dollar exchange rate and partly due to a few large soy orders.
The September contract for wheat on the Matif closed €2,75 lower yesterday at €202,50 per tonne. On the CBoT, wheat also took a step back last trading session. The September contract closed 0,3% lower at $5.28¼ per bushel. Corn and soy showed a plus on the stock exchange in Chicago. Corn closed 2% higher at $3.78 a bushel. Soybean followed close behind corn, closing 1,9% higher at $9.56¼ per bushel.
Wheat continues to explore the bottom in the market. While there was some bullish news yesterday. The Russian news agency Interfax reports, based on data from the Russian Ministry of Agriculture, that the wheat yield in the country is more than 20% lower than last season. This season the yield is 4 tons per hectare compared to 5,1 tons a year earlier. Until August 14, Russian wheat growers have harvested 59,8 million tons. That is 3,2 million tons less than last season according to Interfax. In total, Russian farmers harvested 73,5 million tons compared to 81,7 million tons last season. The average yield is 3,3 tons per hectare compared to 3,7 tons last season. According to the ministry, a bright spot is that the quality of the wheat this season is better than last season.
Despite lower yields, the quotation for Russian Black Sea wheat took a step back. Ikar's quotation fell by $3 to $218 per tonne. SovEcon expects Russia to export 4,6 million tons of wheat in August. In July, Russia exported 3,6 million tons of wheat.
Threshing summer grain does not make any progress
In the US, the winter wheat harvest is almost complete with 96% harvested according to this week's Crop Progress report. Much work still needs to be done with spring wheat. Up to and including August 18, 31% of the area has been threshed. The five-year average for the week stands at 36%. The condition of the spring wheat that is still stable has improved slightly with 63% good or excellent compared to 62% last week. The condition of barley in the US has hardly changed, according to the USDA. Just like last week, 69% of the area receives a good or excellent rating. Barley threshing is lagging behind. 30% of barley has been threshed compared to 43% in both the five-year average and last season.
The USDA made few adjustments in the condition of corn and soy this week. 57% of the corn area receives a good or excellent rating. For soy this is 68% and for both crops this is the same as last week.
The demand for grains and soya is somewhat disappointing across the board, according to various analysts. A drop in the dollar to an eight-month low makes U.S. exporters more competitive in the global market. Soya received support yesterday from an order from China. The USDA announces that China has purchased 332.000 tons of soy in the US. In addition, 110.000 have been captured with an unknown destination. That question is more than welcome in the somewhat ailing grain market.