Drought and expensive fertilizer demand a lot from growers.

The May wheat contract on the Matif closed €0,50 lower yesterday at €191 per ton. On the CBoT, wheat closed 5 cents higher at $6.29½ per bushel. Corn rose 5½ cents to $4.73¾ per bushel. Soybeans were the biggest gainer on the Chicago exchange during the past trading session, rising 19¾ cents to $12.07½ per bushel.

It is on the dry side in our region, but there is no real cause for concern regarding the grains yet. The rain last weekend in parts of Western Europe was, however, more than welcome.

Further east and southeast in Europe, the situation regarding water is becoming tense. The new Hungarian Prime Minister, Peter Magyar, who takes over from Viktor Orbán on May 9, announced emergency measures last weekend to help farmers after last April was also very dry in Hungary and problems with severe drought are worsening. Magyar is pushing for immediate aid in the short term and water conservation plans for the longer term. "We urgently need an action plan to minimize the impact of the severe drought expected this year, both on water supplies and on the protection of nature, the landscape, and agriculture," said Magyar.

Watch the costs
In Romania, maize is falling out of favor with farmers due to drought and high cultivation costs. At least, that is what research by news agency Bloomberg suggests. According to a poll conducted by the news agency among traders and analysts, the maize acreage is set to reach its lowest level since 2015. This season, approximately 1,6 million hectares of maize are being sown in Romania, compared to nearly 2 million hectares last season. If the forecast holds true, the acreage will therefore shrink by nearly 20%.

The reason for the reduced interest in maize among growers in Romania is twofold. Farmers, particularly in the west and south of the country, already have considerable experience with drought. This season looks set to be another very dry year. In recent months, very little rain and snow has fallen by Romanian standards. As a result, there is hardly any moisture reserve in the soil.

Another factor is the increased price of fertilizer due to disruptions in the Strait of Hormuz. Margins in agriculture are already not great, and a crop like maize, which requires relatively high levels of nitrogen and is a fairly expensive crop, is quite a gamble. Incidentally, this is not an exclusively Romanian problem. Earlier, a growers' association in France also raised the alarm. They estimate that up to 15% less maize can be sown in France due to the sharply increased cultivation costs.

Poor growing conditions and expensive fertilizer have led to Mihai Sadica, a farmer in Romania, not planting corn this year. It is becoming increasingly difficult to make a profit from corn cultivation, even in irrigated areas, he told Bloomberg. "Production costs have risen significantly," said Sadica, chairman of a local growers' association in Dobrogea, in southeastern Romania. "Selling prices have not adjusted to this."

Wheat is ahead in the US
In the US, drought is and remains a major issue as well. Nevertheless, winter wheat is looking slightly better. Of the acreage, 31% received a rating of good or excellent in the Crop Progress report this week, compared to 30% last week. Almost half of the winter wheat, namely 49%, has reached ear.

The sowing of spring wheat is lagging somewhat behind previous years. Of the planned acreage, 32% is in the ground, compared to 35% in the five-year average and 42% this week last year. Of the barley, 49% has been sown, compared to 43% in the five-year average.

The rain last week in large parts of the Corn Belt did not cause significant delays in maize planting. Last week, a quarter had been planted, and that is now 38%. This is the same as this week last year. The five-year average stands at 34% planted. Of the planned soybean acreage, 33% has been planted, compared to 23% in the five-year average.