It is no longer news for the average farmer, but the fact that grain yields are not easy is now also evident in the new Mars bulletin from the JRC. The scientific office of the European Commission is not making any major adjustments to the root crops. However, the market remains dominated by a sufficient supply of cheap wheat from the Black Sea region. In the US, the USDA has adjusted the corn and soy levels downwards. However, compared to last season, both crops are still doing well.
The September contract for wheat on the Matif closed €5 lower yesterday at €189,50 per tonne. On the CBoT, wheat lost 0,8% to close at $4.98 per bushel. Corn fell a bit more, closing down 1,6% to $3.62 per bushel. In contrast to grains, soy was on the rise on the Chicago stock exchange, closing 0,8% higher at $9.59¾ per bushel.
An ample supply of wheat, especially from the Black Sea region, is cited by analysts as an important cause for the negative mood on the grain market. Market bureau Ikar quoted Russian Black Sea wheat $2 lower at $216 per tonne. Russian exports fell slightly to 1,16 million tons last week compared to 1,35 million tons a week earlier. With 980.000 tons, wheat was by far the most important product in exports, SovEcon writes.
Below average harvest in the EU
The fact that the growing season in the EU is going according to the book is also starting to dawn on the JRC, the scientific office of the European Commission. In the August edition of the Mars bulletin, the JRC writes that at EU level the yield of almost all crops has fallen below the five-year average. The total grain yield has been reduced by 3% compared to the July edition of the Mars bulletin to 5,36 tons per hectare. That is 2% below the five-year average of 5,48 tons per hectare. Drought and heat cause problems in the center and east of the European Union. In the north it is wetness that the crops suffer from.
It is noteworthy that the beet harvest is estimated at 73,4 tonnes per hectare. This is slightly above the five-year average of 73,1 tonnes per hectare. The potato yield has been kept the same as in the previous edition of the report, at 35,1 tonnes per hectare. If we draw a parallel with the grains for root crops, a downward correction could follow when the harvest starts.
Corn and soy are declining somewhat
In the US, corn and soy are doing relatively well, as the Pro Farmer Crop Tour showed last week. However, the USDA did make some adjustments in the new edition of the Crop Progress report. Of the corn area, 65% received a good or excellent rating compared to 67% last week. Last year, 'only' 56% rated it as good or excellent. Soy has also declined somewhat. 67% are good or excellent compared to 68% last week.
American farmers made a big push last week by threshing spring wheat. 51% has now been harvested compared to 31% a week earlier. The five-year average for this week is 53%. Threshing of spring barley is slower; 47% have been threshed compared to 30% a week earlier and 61% in the five-year average.
The fact that maize is under pressure on the CBoT can be explained if we look at the relatively favorable course of the growing season. The fact that soy is taking a step up is not entirely consistent with this. However, soy, as an oilseed, receives support from petroleum. What also helps is a possible strike by soy processors in Argentina. Buyers are turning to the US sooner for the sake of security of supply, some analysts say.