Wheat started the new week with a major correction. Tensions in the Black Sea region played a major role in the higher wheat prices last week. Fears of a new escalation between Russia and Ukraine are now receding somewhat. In the US, the harvest of corn and soybeans is ahead of the multi-year average. However, analysts were mainly concerned about the rating of corn in the new Crop Progress report from the USDA.
Wheat closed yesterday on the Matif €4,50 lower at €220,50 per tonne. On the CBoT, wheat fell 2,7% to $5.78½ per bushel. Corn and soybeans held up better on the Chicago exchange. Corn lost 0,6% to $4.10¾ per bushel. Soybeans limited their losses to 0,2% to $10.05½ per bushel.
Tensions in the Black Sea region, which played a major role in last week's wheat rally, have eased somewhat, analysts say. Russia last week targeted a grain-laden merchant ship just outside Romanian territorial waters. The possibility that Ukraine could use Western long-range weapons on targets further inside Russia and a possible Kremlin response to that also caused unrest that spilled over into the wheat market. That threat has not gone away, but the risks are seen as somewhat less serious on the wheat market.
Russia exported 990.000 tons of grain last week, according to SovEcon data. That is 70.000 tons less than a week earlier. By far the largest share of Russian grain exports consists of wheat, namely 980.000 tons. The price of Russian wheat has increased slightly. Ikar puts the quotation for Russian Black Sea wheat at $216 per ton. That is $1 higher than last week.
More bearish news for wheat came from Canada. Statistics Canada estimates the total wheat harvest at 34,3 million tonnes. The wheat harvest in Canada is therefore 4,1% higher than last season. In the previous forecast, a harvest of 34,4 million tonnes of wheat was still expected.
Smooth start to the US harvest
In the US, combines are in corn and soybeans. 9% of the corn area has been harvested according to the USDA Crop Progress report. The five-year average for this week is 6%. The first soybean harvest figures are also in the report this week. Threshing is going well with 6% harvested compared to 3% in the five-year average and 4% last season.
The condition of corn has improved somewhat. Of the area, 65% is rated good or excellent, compared to 64% last week. Soybeans have declined somewhat, with 64% good or excellent, compared to 65% last week. Some analysts have reservations about these figures. In the eastern part of the corn belt, it is dry and no significant rain is forecast for the next ten days. For the plots that are ripe or almost ripe, dry weather is favorable for the harvest. Corn and soybeans that have yet to set need moisture for the last bushels.
The spring wheat and barley harvest is well underway in the US. 92% of the spring wheat has been threshed and 94% of the spring barley has been harvested. The planting of winter wheat is continuing apace. Of the planned area, 14% is in the ground, compared to 13% this week in the five-year average. In Washington state, farmers are furthest along with planting, with 43% of the planned area planted there.