European Commission does not expect top-quality wheat

The May wheat contract on the Matif closed €4,25 lower yesterday at €191,50 per ton. On the CBoT, wheat also took a step back by 18 cents to $6.23 per bushel. Corn also closed lower, but the loss was limited to 1 cents to close at $4.64 per bushel. Soybeans moved more sideways than cereals and closed the day down a quarter cent to $11.82 per bushel.

The European Commission estimates the total grain harvest this season at 278,1 million tonnes. This means the harvest is 3,2% lower than last season, but 1,5% above the five-year average. According to the Commission, the smaller harvest is mainly due to lower yields per hectare. Last year, yields were very high, and provided the weather does not cause any unusual occurrences, they should be closer to the long-term average this season. According to the European Commission, wheat production in the upcoming harvest will be 6,2% lower than in 2025/26. For maize, the Commission projects a yield that is 5,3% higher than last season. The Commission writes that rising fertilizer prices just before maize sowing had properly begun could cause the acreage to turn out smaller than currently projected.

For oilseeds, the European Commission forecasts a harvest of 32,3 million tonnes. This is 3,3% more than last season and 4,6% above the five-year average. The larger harvest is mainly due to sunflowers. The cultivated area has been expanded and a higher yield per hectare is expected. Taken together, this results in a sunflower harvest that is 14,5% larger than last season.

frost damage
Slightly more winter cereals have been sown in Poland this season, according to figures from GUS, the Polish statistical office. Compared to last season, 1,1% more winter cereals were sown, bringing the total acreage in Poland to 4,5 million hectares. Winter wheat is by far the largest winter cereal, at 2,3 million hectares. This is followed by triticale with 1,1 million hectares and rye, of which Polish growers have sown 0,6 million hectares.

The proportion of winter cereals that overwintered is slightly higher this season than last season, writes GUS. In some regions, the mercury dropped to 25 degrees below zero in January and February. The low temperature, combined with a drying wind and insufficient snow, has caused damage to Polish winter cereals.

Rain in Russia
In Russia, spring fieldwork is lagging behind last year. Less has been sown than last season, but according to Russian Agriculture Minister Oksana Lut, this does not necessarily mean anything for the yield. "We are currently following the trend of 2022, when sowing took place quite late. As you may recall, we had a record harvest of 157 million tons of grain in 2022. Sowing late therefore certainly offers the possibility of a larger harvest, and that is what we are counting on," Lut told Russian journalists present at a working visit in the southern province of Stavropol. The fact that work is getting underway late is due to the heavy rainfall in parts of the south and the central Volga region. "It is simply a matter of the weather," said Lut, adding that Russian farmers are 'well-equipped' technically.

No significant rain in the US
There is absolutely no sign of wet conditions in large parts of the US, according to the new drought monitor. The rain that fell midway through this week has not yet been incorporated, but the precipitation that fell earlier has not caused any substantial change. It was and remains dry in the US, except for large parts of the Corn Belt. Nevertheless, the percentage of winter wheat struggling with drought has dropped from 70% last week to 69% this week.

According to analysts, the fact that wheat has taken a step back on the CBoT is primarily due to profit-taking. US wheat was already relatively expensive on the world market, and the recent rally has not improved the situation. A lower dollar exchange rate and drought in the US are supporting the wheat price, but a relatively limited correction like yesterday's is to be expected, according to various analysts.