Wheat was on the rise on the European and American stock exchanges last trading session. Drought in the US and Russia is causing a steady undertone in the market. Coceral lowered the yield forecast for grains in the EU and the United Kingdom. In France and the UK, less winter wheat was sown than previously expected. Furthermore, the trade is preparing for the Wasde report. Traders and analysts hope that the report will provide an insight into Donald Trump's trade policy.
The March wheat contract on the Matif closed yesterday at €209,25 per tonne. The May contract closed €2 higher at €223,75 per tonne. Grains also closed higher on the Chicago exchange last trading session. Wheat gained 2,1% to $5.45¼ per bushel. Corn closed 0,8% higher at $4.58¾ per bushel. Soybeans took a step back by 1% to $9.99¾ per bushel.
Drought in the American and Russian wheat belts is causing a certain steady undertone in the wheat market. Rain is particularly necessary on the northern American prairies for the baking wheat 'hard red wheat' that is widely grown there. In the important wheat states of Kansas and Texas, the wheat situation has deteriorated according to the USDA. 52% of the wheat in Kansas is rated good or excellent, compared to 54% last week. In Texas, the state with the largest wheat area after Kansas, 28% is rated good or excellent, compared to 34% a week earlier. In Oklahoma, winter wheat has benefited from rain. There, the rating good or excellent shot up from 35% last week to 46% this week.
In Russia, moisture is also more than welcome, but for winter wheat there it can do less harm if it takes a while before the rain falls, according to some sources. Incidentally, the Ikar quotation for Russian wheat took a step back by $1 to $247 per tonne FOB (delivered on the ship). Reports from the Russian Ministry of Agriculture about the possible tightening of the export quotas have made little impression on the market in this regard.
Less wheat sown in France
Coceral has lowered its yield forecast for the 2025 grain harvest in the EU and the UK to 296,1 million tonnes. In December, Coceral was still counting on a European harvest of 297,8 million tonnes. The wheat harvest has been reduced by 3,2 million tonnes to 137,2 million tonnes. This means that Coceral is still well above the 2024 harvest, when 125,1 million tonnes of wheat was threshed. The higher yield is mainly due to an expansion in the European wheat area and because the agency is counting on a yield around the multi-year average. In France and the UK, less wheat was sown than previously expected.
In Brazil, 61% of the soybean area was harvested last Thursday, AgRural writes in the weekly market report. Last week, the harvest was halfway. Last year this week, 55% was harvested. In Rio Grande do Sul (the southernmost province of Brazil), the hectare yields show a downward trend as the harvest progresses. According to AgRural, the hot and dry weather is costing yields in the later soybeans.
Tip of the veil
The USDA will release the February edition of the Wasde report tonight, Dutch time. Normally, this is not the most exciting edition of the year. Due to the trade war that Trump unleashed, this time it is different. How does the American Department of Agriculture deal with the import tariffs that Trump is brandishing? According to a spokesperson for the USDA, the department only looks at the trade rules that are currently in effect, as reported by Bloomberg. The approach is in line with established practice, according to the spokesperson. Traders and farmers hope that tonight's Wasde will give a glimpse of how Trump's trade barriers will work out in practice.