Analysis Grains & Commodities
European grain yield map turns red
In the series of yield figures (it seems like quartets) it was the turn of the European Commission yesterday. And they also paint a picture that the 2024 harvest is one that growers can quickly forget. If you look at the prices on the futures market, you would almost think that there is little going on. One of the major purchasing countries on the world market has different ideas about this, as revealed by research by Reuters.
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Choose the subscription that suits youThe September wheat contract on the Matif closed yesterday €3,75 higher at €202,25 per tonne. On the CBoT, prices were also on the rise during the last trading session. Wheat was the biggest gainer, rising 2,1% to $5.25 per bushel. Corn gained 1,8% to $6.71¾ per bushel. Soybeans followed in the wake of grains, closing 1,6% higher at $9.73¾ per bushel.
The European Commission has revised its yield forecast for wheat downwards this season. For the 2024/25 season, the Commission now expects a harvest of 116,1 million tonnes of soft wheat. In the July forecast, the Commission still assumed 120,8 million tonnes. The harvest is therefore 7,5% lower than last season and 8,4% below the five-year average. The total grain harvest is estimated at 264,5 million tonnes. That is 7,1 million tonnes less than in the previous forecast and the harvest is therefore 5,9% below the five-year average. Only oats stand out with a larger expected harvest. With 7,4 million tonnes in the forecast, the oat yield this season is 27,1% higher than last season and 3,2% higher than the five-year average. Oats are therefore the only cereal for which the harvest this season is above the five-year average.
With wheat prices hovering around ‘normal’ despite poor EU yields, you’d think the volatility that plagued the post-Russian invasion would be behind us for good. Reuters takes a look behind the scenes at one of the world’s largest wheat importers: Egypt. President Sisi isn’t so sure Egypt has enough supplies and has personally meddled in its purchasing policy, Reuters shows.
Threat
Rising tensions in the Middle East and between grain exporting powers Russia and Ukraine, and at the same time wheat prices that were under pressure; the perfect moment to build up stock, was the idea of the Egyptian state buyer Gasc and the Egyptian government. A July tender was submitted relatively sharply with prices of around $200 per ton. Where normally tenders of up to 200.000, 250.000 tons are issued, Gasc suddenly came up with a monster tender of 3,8 million at the beginning of August. It was not possible to fill that tender with sharp offers. Egypt was only able to secure 7% of the intended volume. Among other things, a payment term of up to nine months turned out to be too crazy for exporters to respond en masse to the tender.
"Egypt is looking for all sorts of ways to buy the wheat as cheaply as possible," Reuters quotes an Egyptian grain trader as saying. "That could be through a tender, direct deals or finding new suppliers." This week, Egypt's prime minister said the country has a six-month supply but is trying to buy more grain when prices are low. Although it's not stated that way, it's clear between the lines that Egypt is trying to influence the grain price to its advantage.