After a wet start to the week, dry and warmer weather is returning according to the weather models. Then the combines can also go outside. In France, the grain harvest is ahead of the five-year average, according to figures from FranceAgriMer. In the US, the weather is cooperating nicely for corn growers. For the prices, these favourable growing conditions are less positive. And then they also have a president who certainly does not inspire confidence in the grain market.
The September wheat contract on the Matif closed yesterday €0,25 higher at €196 per tonne. On the CBoT, wheat closed in the red. Wheat closed 1,5% lower on the Chicago exchange, closing at $5.39¾ per bushel. Corn was the biggest loser, down 3,1% to $4.18 per bushel. Soybeans were among the grains in the last trading session, down 2,3% to $10.31¾ per bushel.
The weather forecasts are and will remain an important factor on the grain market. After a wet weekend and a rainy start to this week in a large part of Europe, the dry and warmer weather will return at the end of this week. So there is something for everyone. Crops that still have to grow have some water again and as it looks now, the grain harvest can be resumed at the end of this week.
In France, the grain harvest is going well. According to FranceAgriMer, 70% of the winter barley in France had been harvested at the beginning of last week, and 11% of the winter wheat. The five-year average for the progress of the threshing of winter barley is 39% and winter wheat 4% for this week. French growers have also made a start with the harvest of spring barley. 14% has been harvested, compared to 5% in the five-year average.
Over half way
In the US, farmers are more than halfway through harvesting winter wheat. 53% of the area has been threshed, according to this week's USDA Crop Progress report. The winter wheat status is unchanged from last week with 48% of the area rated good or excellent. Last year this week, that was 51%. Meanwhile, spring wheat is also growing with 61% of the area in the ear compared to 58% in the five-year average for this week. The condition of the spring wheat has deteriorated somewhat. Of the area, 50% is now rated good or excellent compared to 53% last week and 75% this week a year earlier.
Corn is doing relatively well in the US with 74% of the area rated good or excellent by the USDA. Last week it was 73% and this week last year it was 68%. Good stands and sufficient moisture and now that the corn is coming into the panicle are raising expectations for the coming corn crop. A relatively large harvest that is likely to come in the US combined with reports of good yields in Brazil is putting pressure on the market. It is only a matter of time before contracts for the new crop on the CBoT fall below $4 per bushel, some analysts say.
Postponement of introduction of import duties
Another uncertain factor on the grain market that is weighing on the market, especially in the US, is Donald Trump's trade policy. Last week, some speculators gambled that Trump would present a trade agreement with China this week, in which the export of American agricultural products would play a role in order to bring the trade balance into balance. A deal does not seem to be close yet, but the Trump administration wants to buy time. After 'Liberation Day' (the plan for tariffs against countries that export more to the US than they import) has already been postponed several times, the deadline is now July 9. But that date is not sacrosanct either. The US Secretary of the Treasury is now talking about August 1 for the introduction of tariffs and according to him, news can be reported in the coming days. According to various sources, there seems to be some movement in the negotiations with the EU and Japan, among other things.