The Paris stock exchange may have suggested otherwise, but it was a busy day for analysts. In the US, the new Crop Progress report was published and there was a surprise for wheat. The drought in the US will not remain without consequences, so to speak. In Europe, we are waiting for drier weather. This was once again underlined in the Mars Bulletin that was also published yesterday. Russian grain exporters are not adhering to their own minimum price, as can be seen from the latest Ikar quotation. In the meantime, Egypt is being squeezed but does not want to point the finger of blame at Russia.
The December wheat contract on the Matif closed yesterday €0,25 higher at €217 per tonne. On the CBoT, wheat took a hit in the last trading session, closing 1,8% lower at $5.58¾ per bushel. Corn also lost ground, closing 1,1% lower at $4.10¾ per bushel. Soybeans followed the grain trend and also closed lower on the Chicago exchange. The November contract closed 1,4% lower at $9.74 per bushel.
Russia has not yet succeeded in raising the wheat price. Ikar lowered the quotation for Russian wheat by $2 to $232 per tonne. This puts the price $8 below the minimum price proposed by the Russian Ministry of Agriculture and the Russian Union of Grain Exporters for October. There are no major changes in exports. According to SovEcon data, Russia exported 1,02 million tonnes of grain last week, of which 1 million tonnes were wheat. A week earlier, 1 million tonnes of wheat was also exported.
Egypt will receive 430.000 tons of wheat later than planned, Egyptian Supply Minister Sherif Farouk told Bloomberg. The wheat was supposed to be delivered in October, with an extension until the first week of November. According to some analysts, the delay shows the challenges Egypt - one of the world's largest wheat importers - is facing in building up sufficient supplies. In Russia, exporters are in dispute over who will be allowed to fill Egypt's large tenders. Egypt does not want to disclose which countries the delayed wheat is supposed to come from. Analysts more or less assume that it concerns Russian suppliers.
Drought in the US
In the US, 80% of the planned area of winter wheat has been sown, according to the new USDA Crop Progress report. Last year this week, 82% was sown and the five-year average is at 84%. 56% of the wheat is above, compared to 61% last year and in the five-year average. This week, the first table on the status of winter wheat was also included in the Crop Progress report. That was a bit of a shock for some analysts. 38% of the winter wheat is rated good or excellent according to the USDA and 23% is rated poor or very poor. For comparison: the ten-year average for this week is 51% good or excellent and 14% poor or very poor. The moderate status of the winter wheat is not entirely unexpected, with 58% of the winter wheat suffering from drought to a greater or lesser extent.
The U.S. corn and soybean harvests are well under way. Soybeans are 89% harvested, according to the USDA, compared to 82% last season and 78% in the five-year average. Even more dramatic is the lead in corn harvests. 81% of corn has been threshed, compared to 68% last season and 64% in the five-year average. Some rain is forecast for the U.S. this week, but growers aren’t worried. The bulk of the crop is in and some rain is welcome to replenish soil moisture.
Wet weather continues
In addition to the USDA, the JRC (the scientific bureau of the European Commission) also published the monthly Mars Bulletin yesterday. The yield of maize in the EU is estimated at 6,66 tonnes per hectare in the new edition. Last month it was 6,85 and the five-year average is 7,35 tonnes per hectare. The expected yields for sunflowers and soybeans were also lowered. A wet period after the drought of last summer in southeastern Europe is costing yields in these crops. Above-average wet conditions are a common thread throughout the October Mars Bulletin. In Western and Central Europe, the harvest of the last crops is delayed by precipitation. Farmers are also forced to wait with the sowing of winter cereals. Partly because priority is given to the harvest of silage and grain maize, beets and potatoes and partly because there are only a limited number of working days.