Americans buy cheap European wheat

The May wheat contract on the Matif closed €2,75 higher yesterday at €196,75 per ton. On the CBoT, the rise in wheat was even stronger, at 11 cents, or 1,9%, to $6.10¾ per bushel. The July Kansas hard red wheat contract even closed yesterday at its highest level in 22 months at $6.79¼ per bushel. Corn lagged somewhat behind wheat, rising by 1 cents to $4.55½ per bushel. Soybeans, in contrast to grains, closed lower, down 4 cents to $11.59¾ per bushel.

Several European traders report that there is interest from the US in wheat from Europe, Reuters reports, among others. American mills are reportedly looking for cheaper alternatives. According to various sources, a Polish trader reports that Poland has sold four ships carrying 30.000 tons of bread wheat each to mills on the US East Coast. This reportedly concerns wheat from the upcoming harvest.

Reuters reports that US wheat in the Gulf of Mexico is trading at $250 to $253 per ton FOB (delivered on the ship) for direct delivery. In the Baltic Sea, the wheat price is $238 to $240 per ton FOB.

Drought is spreading
The fact that rain is expected for a large part of the US early next month dampened sentiment on the American market earlier this week. However, the rain front is not penetrating a large part of the American Wheat Belt. Another comment now also frequently heard is that even if it rains, a significant portion of the damage has already been done in states like Kansas and Oklahoma.

Meanwhile, the drought in the US continues to spread, according to this week's new drought monitor. Approximately 70% of winter wheat is affected by drought. That percentage stood at 68% last week. A temperature record was also broken on the northern prairies this week. In the afternoon, the mercury rose to 32 degrees Celsius.

The International Grains Council (IGC) released a new estimate for the global grain harvest yesterday. The total grain harvest is estimated at 2.414 million tonnes. This is 3 million tonnes lower than the forecast from March. The wheat harvest estimate has been lowered by 1 million tonnes to 821 million tonnes. Wheat consumption has decreased by 4 million tonnes compared to last month, to 825 million tonnes.

In the commentary on the figures, the IGC also points out the high price of fertilizer. "Concerns about the affordability of fertilizer and decisions regarding its use have contributed to the uncertainty regarding harvest expectations for 2026/27, including in parts of the Southern Hemisphere, where crop needs may not be fully met."

Due to an upward revision of grain stocks at the start of the season and a reduction in expected grain consumption, stocks at the end of the 2026/27 season will turn out higher than in the IGC's previous forecast. However, the IGC notes that grain consumption is rising for the fourth consecutive year. Growth in demand for grain for feed and industrial applications is slower compared to last season.