Wheat and maize made strong gains this week. The first half of today's trading session is also showing positive signs. By 3 p.m., the coming front month of September had risen to 250.00 euros/tonne and already peaked at 252.50 euros/tonne. Corn is also climbing today. After closing at 202.75 euros/t yesterday (Thursday), the June contract was already trading at 206.75 euros/t at the peak today. On the CBoT, similar trends are evident in pre-market trading. Prices also rose on the cash markets this week, but the volumes traded are manageable due to the public holiday.
The price trend is being driven primarily by the weather. In Europe, especially in Germany, winter wheat stocks have only rooted shallowly. With the dry and warm weather conditions at the beginning of May, the first stocks already need precipitation again. This has not eased concerns about quality, even after the winter conditions. For this reason, many producers and land traders are waiting to conclude ex-harvest contracts. In many cases, they want to wait and see how things develop in May. The weather also plays a role in southern Russia. As in Ukraine, it is currently dry there. In the Russian growing regions in particular, the risk of night frosts is also playing a role in the news. The consulting firm IKAR therefore recently reduced its 2024/25 harvest forecast by 2 million tons to 91 million tons. Drought is also looming in the Great Plains and western prairie regions of Canada and is affecting yield expectations. Today, Friday, the USDA will issue a new assessment of global ending stocks and production as part of the WASDE report. This will also include initial forecasts for the coming 2024/25 harvest. Market analysts expect harvests and ending stocks to be up on the previous year. In the case of maize, analysts are expecting adjustments for Brazil and Argentina in particular. The recent flooding, particularly in the south, is likely to affect the second maize harvest. In Argentina, disease infestation by insects remains a major issue.
ZMP Live Expert Opinion
The grain markets have entered the weather-sensitive phase. Export competition only plays a subordinate role. As the latest news can be read and interpreted, supplies are likely to be tighter in the coming season.
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