In Germany, the grain harvest this season will fall below 40 million tons, according to the German Farmers' Association. The growing season certainly did not cooperate, but the union is also getting the wind of politics. Impractical rules make it impossible to produce what the market demands, the criticism goes. The German harvest figures had little effect on the market. Prices closed in the red across the board.
The September contract for wheat on the Matif closed yesterday €2,50 lower at €196,75 per tonne. Prices on the CBoT also closed in the red last trading session. Wheat lost 1,7% to $5.11 per bushel. Corn closed 1,1% lower at $3.71½ a bushel. Soy was the biggest decliner, down 2,3% to $9.41¼ per bushel.
The Deutscher Bauernverband (DBV) yesterday released new figures for the 2024 grain harvest. The total German grain harvest is estimated at 39,3 million tons. That is well below the multi-year average. Last season, 42 million tons of grain were dropped. Wheat is by far the most important grain crop and German farmers threshed 18,0 million tons this season compared to 21,2 million tons last season. Due to the wet autumn, 330.000 hectares less winter wheat was sown. The extremely wet growing season has also caused hectare yields to lag behind.
The total harvest of winter barley is estimated by the DBV at 8,9 million tons compared to 9,5 million tons last season. Here too, it plays an important role in the lagging returns. For oilseed rape, the growing season was slightly better than last season in terms of yields. The average hectare yield is 3,38 tons per hectare compared to 3,35 tons last year. However, due to a shrinkage in the area, the total harvest in Germany is 200.000 tons lower than last season's 3,7 million tons.
'Remove impractical requirements'
"An extremely wet growing season from autumn to early summer and further showers during the harvest have presented our farmers with major challenges," writes Joachim Rukwied, chairman of the DBV, in the explanation of the figures. "To guarantee yields and quality in the future, obstacles and impractical requirements must be removed! It cannot be that we are asking for baking wheat, but that we farmers can only grow feed wheat due to new regulations, such as with regard to fertilization."
Rukwied is also concerned about the increasing restrictions in crop protection. "The high fungal pressure this season shows how important it is to be able to protect crops effectively. The 'future program' crop protection does not provide solutions to the challenges we face in agriculture. We urgently need a new policy in the field of crop protection ." Beets, corn and potatoes have largely benefited from the wet growing season, according to the DBV. But here too, the high burden of disease in combination with the thinned out package of resources is a point of concern.
According to the DBV, there are no cost-covering prices. Farmers are getting into trouble due to the extreme price drop, especially on the grain market. Growing grain in Germany is no longer economically possible due to high production costs and low prices, according to the association. According to Rukwied, numerous political and legal obstacles have been placed in the way of competitiveness for German farmers. A program to restore competitiveness is urgently needed, according to Rukwied.
Staking
There is a lot of buzz in the US about a railway strike in Canada. Employees of the two largest rail companies (accounting for 80% of Canada's rail freight) walked off work yesterday after negotiations with unions broke down. Players in the grain market fear a significant influx of grain from Canada to the US. How realistic that fear is is debatable, according to analysts. The alternative to rail transport is road transport. Opinions differ as to whether there are enough trucks available to get significantly more grain across the US border. This is separate from the higher costs associated with it.