Wheat reports are contradictory. On the one hand, the USDA came out with price-depressing reports earlier this week in the Wasde report and the Crop Progress report. On the other hand, more and more reports are appearing about high disease pressure in the US and the weather in Europe is not entirely cooperating for a top yield.
The September wheat contract on the Matif closed unchanged yesterday at €204,50 per tonne. On the CBoT, wheat was limited in its change. The May contract on the Chicago exchange closed 2½ cents higher at $5.01½ per bushel. Corn took a step back, closing 1% lower at $4.36 per bushel. Soybeans moved sideways, adding 0,1% to $10.67¼ per bushel.
French growers have sown slightly less winter wheat than previously predicted. In April, the French Ministry of Agriculture assumed an area of 4,63 million hectares and this has now been adjusted to 4,60 million hectares. Compared to last season, the wheat area is 9,1% larger. The larger area is not illogical if we think back to the wet autumn of 2023 when it was simply not possible to sow all the planned wheat for the 2024 harvest. Because last autumn was much more favourable in terms of weather, little spring wheat was sown in France. By far the largest part of the area, namely 4,57 million hectares, is winter wheat. The French ministry estimates the area of barley at 1,74 million hectares. That is 3,8% less than last season. The area of spring barley in particular lost some ground. With 523.000 hectares, 7,3% less spring barley was sown.
Corn is out of favor
Maize is falling out of favor with French arable farmers. With 1,48 million hectares, 7,6% less has been sown than last year. The area of maize is therefore 3,3% below the five-year average. Over the last ten years, the maize area has shrunk by an average of 1,1%, the ministry notes.
The somewhat drier weather type that we have been experiencing since last autumn has worked to our advantage so far. That advantage is now turning into a disadvantage according to various analysts. The ears are coming through or have come through and when the ear filling starts, the crop simply needs moisture. That is not in the weather reports for a large part of Europe.
Russia and Ukraine are also in the news again, and not just a possible meeting between Zelensky and Putin in Turkey. The EU is reportedly considering re-introducing various import restrictions that were scrapped to support Ukraine after the Russian invasion. At least, that is what the Financial Times reports, based on anonymous diplomats. The proposal that has been sent to the EU member states would drastically limit the duty-free import of agricultural products from Ukraine. That would be a blow to Ukrainian farmers, the Financial Times reports.
Disease pressure in American wheat belt
Both the Wasde report and the Crop Progress report from earlier this week were bearish for wheat. However, players in the wheat market do not seem entirely convinced of a top harvest. The warm and dry weather in large parts of the American wheat belt provide ideal conditions for the propagation of wheat curl mite. The mite spreads, among other things, the wheat streak mosaic virus. The virus has already been detected in several places in the wheat belt and contamination is decimating yields, according to various local sources.