Despite reports of drought and high disease pressure, the expected yields of wheat in Kansas are not disappointing on the first day of the Crop Tour in the state. In Russia, there was a lot of fuss about frost damage, but that is also not so bad according to the Russian Ministry of Agriculture. Algeria has secured 700.000 tons of wheat in a tender for a considerably lower price than what was bought for a month ago.
The September wheat contract on the Matif closed yesterday €0,50 higher at €205. In Chicago, wheat was more strongly on the rise and gained 1,5% to $5.08¾ per bushel. Corn also closed higher, but the increase there was somewhat more limited than wheat at 0,6%. Incidentally, corn ended at $4.38½ per bushel. Soybeans mainly moved sideways and lost ¼ cent to $10.67 per bushel.
In northern Kansas, wheat yields are far from disappointing. At least that is evident from the first day of the Kansas Wheat Tour. The average yield is estimated at 50,5 bushels per acre (approximately 3,4 tons per hectare). The five-year average is 45,1 bushels per acre and last year the yield was 49,9 bushels. The wheat yield is still well below the record harvest in 2016, when the yield was 57 bushels per acre (approximately 3,8 tons per hectare). Some analysts do note that disease pressure is higher in the central and southern part of Kansas and the wheat is doing less well there. By the end of this week, the tour will have completed its round and the final forecast of the wheat yield in Kansas will be announced.
Frost damage is limited
The Russian Ministry of Agriculture yesterday provided an update on the extent of frost damage to winter wheat. According to the ministry, damage has been observed in roughly 100.000 hectares. The frost damage is not significant, according to the ministry, and is about one-tenth of the area that was damaged last year.
On the demand side, there is news from Algeria. According to preliminary reports, Algeria has secured between 650.000 and 700.000 tons of wheat in the most recent tender. The average price is said to be $244,50 per ton C&F (freight forward), according to sources. That is about $20 lower than the average price in last month's tender.
Weather cooperates
The weather is good for corn and soybean growers in the US. Sowing is going well so far and with sowing well over halfway through, the southern part of the corn belt is getting a refreshing shower. In Brazil, the soybean harvest is behind us and all eyes are on the next crop of corn. However, no rain is expected for Brazil. According to local sources, that is not yet a problem. There is enough moisture in the soil to get the corn going. Some rain at the end of this month and early June would be welcome. A bit further south, in Argentina, it is finally getting drier according to the weather reports. That is good for the soybean harvest in the country.