Dry spring keeps work moving smoothly in Europe

The May wheat contract on the Matif closed yesterday at €0,25 per tonne at €208,75 per tonne. On the CBoT, grains took a step back. Wheat was the biggest loser, down 1,4% to $5.28¼ per bushel. Corn closed 0,8% lower at $4.72 per bushel. Soybeans closed last trading session higher, up 0,5% to $10.40¼ per bushel.

In the April edition of the Mars Bulletin, the European Commission's scientific bureau, the JRC, is moderately optimistic about the expected cereal yield in the EU for the 2025 harvest. The wheat yield is estimated by the JRC at 6,03 tonnes per hectare, compared to 5,77 tonnes per hectare in the five-year average.

There are concerns about a precipitation deficit in an area that runs from northern France to Finland. There are also areas in southeastern Europe and Turkey where there has been too little rain. In parts of Spain, Portugal and Italy there are regions with a precipitation surplus. According to the JRC, winter grains in Italy in particular have suffered damage due to the excessive precipitation.

The drought in large parts of Europe does not only have negative effects according to the JRC. The sowing of spring barley has gone smoothly. Farmers in Europe have also made good progress with the sowing of beets and the planting of potatoes. However, the institute warns that if the drought continues, the crops could have difficulty getting started.

In the US, the wheat price was under pressure last trading session due to rain forecast there. Rain is coming for almost the entire wheat belt in the middle of the US, according to weather forecasters.

Voltage:
Trump wouldn't be Trump if he didn't cause a stir. The Wall Street Journal reported that Trump might want to lower the additional tariff on products from China, which is currently at 145%, to 50% to 65% in order to reduce tensions with China. Trump calls the current tariffs high and does not expect the import tariffs to remain this high for very long. However, abolishing the import duties altogether is also out of the question according to the American president. Trump also claims that his government is in talks with China about trade.

The battle between Trump and Jerome Powell, the chairman of the Fed, has also calmed down somewhat. Trump indicated that he has no plans to fire Powell. The president had hinted at this earlier because he believes Powell should lower interest rates to stimulate the American economy. Incidentally, Powell's term as chairman of the American central bank expires in just over a year.

According to analysts, Trump's somewhat more moderate tone mainly affects soy. Incidentally, American arable farmers have less confidence in the trade policy. For soy, the Americans are relatively largely dependent on exports. Now that there is a lot of uncertainty about this, farmers are cutting back on their soy acreage. Several analysts expect that the soy acreage for the 2025 harvest will be the smallest in five years. A reasonable reduction in the acreage could already largely compensate for the loss of China as a sales market, according to some experts.