Supply pressures continue to dominate market sentiment right now. In the US, corn (maize) and soybean crops are on course for bumper harvests and this is pressuring prices, despite huge export figures for US soybean.On this side of the Atlantic, prices have been helped somewhat by the falling yield expectations on the continent. In France, the agriculture ministry has chopped yield estimates for the country’s soft wheat crop from 3.2t/ac last year to just 2.2t/ac this season.
Supply pressures continue to dominate market sentiment right now. In the US, corn (maize) and soybean crops are on course for bumper harvests and this is pressuring prices, despite huge export figures for US soybean.
On this side of the Atlantic, prices have been helped somewhat by the falling yield expectations on the continent. In France, the agriculture ministry has chopped yield estimates for the country’s soft wheat crop from 3.2t/ac last year to just 2.2t/ac this season.
Overall, the French agriculture ministry is forecasting a near 12m t decline in domestic wheat production this year to 29.1m t, the smallest French wheat harvest in 30 years.
A similar story is emerging in the Baltic states in Europe as very wet weather damages wheat crops. Grain exporters in the region are estimating declines of close to 10% for wheat production, with the Latvian and Lithuanian wheat harvest projected at about 6m tonnes.
In Russia, the opposite is the case as initial yields appear very strong at close to 5t/ha with Russian agribusiness Black Earth Farming projecting Russian wheat production at 66m t to 68m t.
However, despite the heavy yields, Black Earth is reporting that wheat crop quality is “worse than average”.
Europe
On the Euronext exchange (MATIF) in Paris, wheat and maize prices have been boosted in recent days while oilseed rape prices are being moved higher on ideas of a lower EU harvest.
December 2016 delivered milling wheat has gained €2/t since the start of the week to move above €171/t, while December 2017 wheat is up to €178/t.
European maize (corn) prices have shown steady gains this week with November 2016 maize up to €167/t and November 2017 maize finishing at €175/t.
Meanwhile, oilseed rape prices have rallied strongly in the last 10 days by jumping up to €370/t, while November 2017 rapeseed moved higher to €360/t.
Chicago
In Chicago (CME), corn prices remain extremely challenged as another bumper harvest becomes more likely. The USDA has reported 74% of the US crop to be in good to excellent condition at this point. On Thursday, December 2016 corn fell to lows of $130/t (€117/t), while December 2017 corn is at $147/t (€131/t).
Having lifted slightly in mid-week, Chicago wheat prices have come back since Wednesday with December 2016 SRW wheat finishing Thursday’s trade below $161/t (€144/t), while December 2017 wheat finished at $189/t (€169/t).
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