Drought, drought and more drought; we can hardly imagine it anymore with rain in the weather reports. But in the Black Sea region, precipitation would be more than welcome. In the Balkans, the corn is suffering from drought and the newly sown winter wheat in eastern Ukraine and western Russia is not getting started due to a lack of moisture. In Brazil, farmers are postponing the sowing of soy in anticipation of precipitation.
The December wheat contract on the Matif closed yesterday €4,25 higher at €220,25 per tonne. The CBoT also started the new week in the green. Wheat rose 2,5% to $5.82½ per bushel. Corn rose slightly more than wheat, gaining 2,9% to $4.13½ per bushel. Soybeans were in between the grains during the last trading session, closing 2,7% higher at $10.39¼ per bushel.
Players in the grain market are getting caught up in the weather forecasts. Rain is forecast for our part of the world. Towards the end of the week, the mercury will drop and showers are expected. Depending on what falls, the sowing of winter wheat may be delayed. That is not something to get nervous about yet.
Will the wheat take root before the frost comes?
More serious are the problems with drought in the east of Ukraine and the west of Russia. It has been warm and dry there for a few months now. These are certainly not the ideal conditions for getting winter crops going. According to various experts, it is important that the wheat wants to grow there now. The time until the first frost is limited. At the end of October, the frost tends to occur there quite often and then there should be a crop for the sake of it. Too much development is not ideal with a view to wintering out, but wheat that is just emerging is even more sensitive to wintering out according to local sources.
The Ikar quotation for Russian Black Sea wheat remains fairly stable. This week, Ikar is quoting $217 per tonne. That is $1 higher than last week. According to SovEcon, Russia exported 910.000 tonnes of grain last week, compared to 1,06 million tonnes a week earlier. Of the grain exports last week, 840.000 tonnes were wheat. SovEcon expects Russia to export 4,8 million tonnes of grain this month, compared to 4,9 million tonnes in September 2023.
In the eastern part of the EU, in the Balkans, it is dry. The European Commission's scientific bureau, the JRC, has further lowered the yield forecast for grain maize in that region. In the Mars Bulletin, the JRC now expects a maize yield of 6,84 tonnes per hectare. That is 3% lower than in the August edition of the report and 7% below the five-year average. Last season, 7,51 tonnes of maize per hectare were threshed; this season, that would be 9% lower.
US corn and soybean stocks remain stable
In the US, the market was also dominated by drought yesterday. On the southern prairies where a lot of wheat is grown, rain fell last weekend, but further north on the corn belt it remained dry. The condition of corn and soybeans remained the same in the new Crop Progress report. According to the USDA, 65% of corn is in good or excellent condition and 64% of corn has received that rating. The harvest of both crops is going reasonably well at this stage. 14% of corn has been harvested, compared to 13% last year this week and 11% in the five-year average. Growers are even further ahead with the soybean harvest. 13% of the area has been harvested. The five-year average is 8% and last year 10% was harvested.
The harvest of spring wheat and barley is almost over in the US, with 96% and 97% harvested respectively. A quarter of the planned area of winter wheat has been sown. Last year, 23% was sown and the five-year average is 24%. So the American farmers are also on track with the sowing of winter wheat.
Waiting for better weather in Brazil
The theme of drought is also reflected in Brazil. According to AgRural, only 0,9% of the planned area of soybeans has been sown in the South American country. Farmers are eagerly awaiting rain. There is hardly any moisture in the soil at the moment, which is why farmers do not dare to take the risk of sowing soybeans. More progress has been made with the first crop of corn. According to AgRural, 26% of the planned area has been sown. But here too, according to the market bureau, work has come to a standstill in anticipation of rain.