The moderate optimism of last week on the grain market was not followed up in the last trading session. This was partly due to the upwardly revised yield estimate of the European Commission. In North America, the weather is cooperating reasonably well. In the North, where they can use rain, it is falling and in the South where the combines are running, dry, solid weather is predicted.
The September wheat contract on the Matif closed yesterday €3,75 lower at €204,25 per tonne. On the CBoT, wheat also took a hit, closing 2,6% lower at $5.52¾ per bushel. Corn closed 2,2% lower at $4.19¼ per bushel in Chicago. Soybeans, like grains, also closed in the red, but with a 0,9% drop to $10.58¾ per bushel, the loss was slightly more limited.
Drought is no longer a major problem in Europe. At least, that is what the JRC, the scientific bureau of the European Commission, writes in the June edition of the Mars Bulletin. That does not mean that sufficient rain has fallen in Europe since the previous edition of the Mars Bulletin. In the west of Belgium and the southwest of the Netherlands, about 50% of the rain that normally falls there has fallen since spring. That is not good for the grain filling, writes the JRC and with little or no precipitation in the weather forecast, the situation is deteriorating according to the bureau. In parts of the east of Germany, the west of France and central France, the situation has also deteriorated further since May due to the lack of precipitation. Hungary, Slovenia and Croatia have also had to deal with a precipitation deficit since the end of May, but because there was still more moisture in the soil here, the situation is less dire.
Higher yield
The JRC has revised the wheat yield forecast slightly upwards from 6,04 tonnes per hectare in May to 6,08 per hectare in June. This would put the wheat harvest 5% above the five-year average and 9% above last season's harvest. The Iberian Peninsula, Bulgaria, Romania and Finland stand out positively. In Italy, the estimated harvest of 5,14 tonnes per hectare is 3% lower than the five-year average.
Argus has raised its yield forecast for the Russian wheat harvest by 4,5 million tons to 84,8 million tons. This would put the 2025 harvest well above that of 2024. Last season, Russia harvested 81,3 million tons of wheat.
Wheat exports remain a bit of a tricky story. Up to June 23, Ukraine has exported 15,6 million tons of wheat. That is 15% less than the same period last season. The USDA predicted that Ukraine would export 2024 million tons of wheat in the 25/16,5 season. That will probably not be achieved. Egypt has imported 31% less this year than last year, the Egyptian Ministry of Agriculture announced. In total, Egypt imported 4,9 million tons of wheat.
Rain falls where it's needed in America
In America, the grain market was somewhat under pressure due to relatively favourable weather. Rain has fallen on the dry northern prairies of the US and in Canada in recent days and more precipitation is on the way according to the weather models. Dry weather is predicted for the southern wheat belt of the US. That is good for the wheat harvest. Up to and including 22 June, 19% of the winter wheat has been threshed, according to this week's Crop Progress report. This means that the harvest is somewhat behind previous years. The five-year average is 28% harvested this week and last year even 38% was threshed. The harvest is furthest in Arkansas and Texas with 70% of the area 'combined' in both states.
The winter wheat status has deteriorated somewhat. 49% of the area is now rated good or excellent by the USDA, compared to 52% last week and also 52% this week a year ago. The USDA is not making any adjustments to the soybean status this week. 66% of the soybean area is rated good or excellent. Last year that was 67%. Corn has deteriorated somewhat. 70% is now rated good or excellent, compared to 72% last week. Last year 69% of corn was rated good or excellent.