Analysis Grains & Commodities
A good wheat harvest is far from over
The potential for good wheat yields is there, but it still has to happen. That is far from a certainty, as the results of the Kansas Wheat Tour prove. Drought is and remains a theme on the grain market. In Russia, the pace has gone out of control as far as grain exports are concerned. The EU, however, is not really able to profit from that.
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Choose the subscription that suits youThe September wheat contract on the Matif closed yesterday €1 higher at €206 per tonne. On the CBoT, the May contracts have now also expired. In Chicago, the first contract of the new crop is only the July contract. Just like in Paris, grains showed a plus in the last trading session. Wheat was the biggest riser with 1,5% to $5.32¾ per bushel. Corn went up 0,7% to $4.48½ per bushel. Soybeans took a big hit in the last trading session and closed 2,6% in the red at $10.51¼ per bushel.
The Wheat Quality Council's three-day Wheat Tour in Kansas is over. The results of the tour through the state give a somewhat contradictory picture. The average yield over the 449 plots visited is calculated at 53 bushels per acre (approximately 3,6 tons per hectare). The yield in the Crop Tour estimate is therefore slightly higher than the USDA forecast from last Monday. That calculated 50 bushels per acre. The total harvest of 338.5 million bushels (approximately 9,2 million tons) in the Crop Tour is lower than the USDA forecast of 345 million bushels (approximately 9,4 million tons). This indicates that a larger part of the area will not be harvested. The Wheat Quality Council does not write this literally, but does discuss it wheat streak mosaic virus that can have a major impact on yield. "On some plots, the typical symptoms were only visible at the edges, while on other fields there were infected areas within the plot and on some plots were completely covered in the virus." And so the Tour notes that it will take three to eight weeks before the harvest is in and anything can happen until then.
Dorst
Drought is still a point of attention, especially for wheat growers on the northern prairies. Especially the spring wheat that is grown there a lot needs a drink of water. Some rain is coming this weekend, according to the weather models. In the latest drought monitor, that rain is of course not yet visible. Both the area of winter and spring wheat in a drought area has increased by 1 percentage point to 23% and 38% respectively.
European wheat exporters are not really profiting from the decline in Russian grain exports. The deficit compared to last season remains fairly stable at around 30%. And that while, according to Russian industry sources, Russia exported 2,4 million tonnes of grain in April. That is no less than 61% less than in the same month a year earlier. The sharp decline in April is related to the export quotas that the Kremlin introduced in February. Over the entire season that starts on 1 July, Russia exported 42,4 million tonnes of grain, or 17% less compared to the same period a year earlier.
The Ukrainian Ministry of Agriculture is keeping the yield forecast for grains at the same level as the previous forecast at 56 million tonnes. This would make the harvest about the same as a year earlier, when 56,2 million tonnes of grain were threshed. Some analysts would not have found a reduction illogical. Due to drought and late frost, the crops are in poorer condition than last season. Earlier this week, APK Inform lowered the harvest forecast for Ukraine by 4% to 55,3 million tonnes.