Despite or perhaps thanks to the relatively dry spring, winter wheat in the EU is doing well overall. The contrast could hardly be greater than with 2024, when the growing season fell through. It is not surprising that the European Commission expects the upcoming wheat harvest to be 13% larger than the last harvest. But then something still needs to happen, because if it remains dry in the coming weeks, this will be at the expense of the yield, according to various analysts. It was also dry on the southern prairies, but that has now changed. Unfortunately, this does not only have positive effects.
The May wheat contract on the Matif closed unchanged yesterday at €202,75 per tonne. On the CBoT, wheat was on the rise, closing 1,4% higher at $5,13 per bushel. Corn was also on the rise, up 1,5% to $4,67¼ per bushel. Soybeans, in contrast to grains, took a step back, 0,6% to $10,34¾ per bushel.
In the EU, winter wheat is generally doing well. The European Commission therefore expects the wheat harvest in 2025 to be 13% larger than the harvest a year earlier. The 2024 harvest was the smallest in twelve years at 111,7 million tonnes. For the coming harvest, the European Commission is counting on a wheat harvest of 126,3 million tonnes. That is 200.000 tonnes less than in the previous forecast from a month ago. For maize and barley, the Commission is keeping the yield forecasts the same at 65,0 and 51,7 million tonnes respectively.
The dry spring that we are experiencing in large parts of Europe is not yet causing problems in the grains. There is enough moisture in the soil to keep the crops going. Several analysts do warn that if the coming rain fails to materialise, the crops will suffer. If we look at the prices on the Matif, the trade is not yet impressed.
From drought to water damage
The United States, the region where most winter wheat is grown, was also dry. But that has changed in the past two days. Heavy showers have fallen in Texas and Oklahoma and more rain is on the way. Locally, analysts are expecting flooding. Excessive rain is less favourable for the quality of winter wheat in the South of the US. The early plots are now ripening and for the protein content and hectolitre weight, getting wet and drying out again a few times is not favourable for the wheat.
According to some experts, wheat's move up on the CBoT is only partly due to the weather forecast. Because the May contract was relatively low, bargain hunters have stepped in, taking the gamble that the price can still move up before the contract expires.
Meanwhile, the Buenos Aires grain exchange expects Argentina to harvest 20,5 million tons of wheat. If this forecast is realized, it will be the second largest wheat harvest ever for the country. Last year, Argentina harvested 18,6 million tons of wheat.