The European wheat price fell below the €200 per tonne level this week for the first time in a month. Favorable growing conditions and the absence of weather extremes ensure that the market is barely moving worldwide. Interest in last year's harvest is also declining.
In the southern United States, the combines have been rolling for another tight month. It won't be long before the grain harvest starts on the European continent. In Western Europe, the grains could do with another shower of water, but that's no cause for concern. Significant rain has fallen, and the winter grains in particular can survive on it.
Market continues to ripple
In the absence of any significant news, the European wheat market is calmly continuing. It also fluctuated around the €200 per tonne level for the September contract at the beginning of June. On Tuesday 10 June, the closing price dropped back to €199, only to recover slightly on Wednesday. On the CBoT, the July contract closed slightly lower at $5.34½. In the US, traders are also busy winding down the 2024/25 season. Trading in wheat from the new harvest has now started and is larger in volume than that in old wheat.
The latest USDA Crop Progress Report shows that nearly all corn has been sown (97%) and most of it is now up. The state of the crop is similar to last year. 10% of the soybeans have yet to be sown. That is average for early June. The beans that have already been sown are doing well.
Harvest delay
4% of the country's winter wheat has now been harvested, which means the harvest rate is slightly behind. Last year, 11% was already harvested. Heavy rains in the southern states are causing delays. In Texas and Oklahoma, almost half has now been threshed, which means the rate here is slightly ahead of the average. The state of winter and spring wheat is good and better than last year. Today (June 12), the USDA is publishing new figures on the size of the country's grain harvest this year. Analysts expect these figures to increase by 3 million bushels. Mainly due to better expectations for winter wheat.
Despite the fact that the war situation in Ukraine is far from calm, it has hardly had any impact on the grain market. Exports of Ukrainian wheat are down 15% over a whole year, and exports of all grains are down 19%. The country is facing a lot of competition from Russia, which is selling wheat with a higher protein content at lower prices, especially in the Middle East. Furthermore, media reports are reaching the effect that Russian forces have set fire to 15.000 hectares of winter grains in the Kherson region, which is not the first time.
Unfortunately, the export figures from the EU are not much better. Between 1 July and 1 June, 19,1 million tonnes of wheat were exported, compared to 28,8 million tonnes last year. That is a decrease of 34%. This means that the old export season is ending with higher final stocks of wheat and other grains.
WHOteeth ideal
Trading in the June grain corn contract in Paris has concluded and the last contract for the old crop (delivery August) closed yesterday at €186 per tonne. On the CBoT, the corn price fell below $4.40 per bushel, which is the lowest price in three months. Sufficient rain and a weather forecast that shows new precipitation are driving the prices. In the American Cornbelt, high temperatures and sufficient moisture are providing ideal conditions, which gives the impression that a record harvest can be achieved. In Argentina and Brazil, higher corn yields are also expected, which is detrimental to American exports.