Tensions between Russia and Ukraine are not easing, but the war premium in the wheat price is being reduced somewhat. Winter wheat for the 2025 harvest is not having an ideal start in the countries around the Black Sea due to drought in the region. In southern Europe, farmers are suffering from too much water. In northern Europe and the US, winter grains are doing relatively well. In Brazil, soybean growers are making good progress with sowing.
The December wheat contract closed yesterday €4,75 lower at €214,25 per tonne. On the CBoT, wheat also took a step back and closed 1,6% lower at $5.35¾ per bushel. Corn saw its losses limited to 0,2% and ended at $4.24¾ per bushel. Soybean showed a cautious plus in the last trading session and closed 0,2% higher at $9.85¾ per bushel.
The Black Sea region remains unsettled, but the war premium in the wheat market is still being lowered somewhat. According to analysts, the main reason for this is that, despite the war violence, the grain export of both Russia and Ukraine is not really suffering. The amount of wheat that Russia has available for export is of attention. SovEcon lowered the wheat export forecast for this season by 1,8 million tons to 44,1 million tons. The total Russian wheat harvest is estimated by the market agency at 52 million tons, compared to 53,6 million tons in the previous forecast.
Drought in the east
The weather also put some pressure on the wheat market during the last trading session. Water fell in eastern Ukraine and south-west Russia, bringing some relief to winter cereals that have been suffering from drought in the region. The Mars Bulletin from the JRC (the scientific bureau of the European Commission) paints a less rosy picture for winter cereals around the Black Sea. Drought in Romania, Bulgaria, Turkey, Ukraine and south-west Russia has made it difficult for winter cereals and rapeseed to get going, according to the JRC. October and the first half of November were the driest periods in Turkey since the JRC started measuring in 1991. In the eastern European part of Russia, near the Urals, it was colder than average, which certainly did not do the crops there any good.
In parts of Spain and northern Italy, farmers have too much water. The damage caused by flooding to arable farming has been limited, according to the JRC. The sowing of winter cereals has been delayed by the wet weather. Although it is getting late, the temperature is sufficient to still be able to sow.
In the Northern and Central part of Europe, Scandinavia and the Baltic States, the past month and a half has been relatively dry. In these areas, 50% to 100% of the average amount of rain has fallen, the JRC writes. This has given farmers the opportunity to sow the planned area of winter wheat. The wheat is generally doing well, the JRC notes.
Wheat planting in the US almost complete
The USDA released the latest edition of the Crop Progess report for this season yesterday. In the US, almost all winter wheat is in the ground. 97% of the planned area has been sown, which is the same as last year this week. The five-year average is slightly higher at 98%. The condition of the winter wheat has improved considerably this week due to rain. 55% of the area is rated good or excellent, compared to 49% last week. These figures of course relate to the coming harvest, but they also have an influence on the mood on the daily market.
Soybeans are supported by orders from China. Some sources report that China quickly bought 8 to 10 shiploads of soybeans from the US last Friday before Trump is in the White House. In Brazil, soybean growers have sown 86% of the planned area, AgRural reports. Last week, the counter was at 80% sown and last year this week 74% of the planned area had been sown.