Grains News, 11th / Jul / 2024

Thu, July 11, 2024

Harvests in the northern hemisphere are progressing rapidly. In the USA, two-thirds of the wheat harvest has already been harvested earlier than usual, while the northern regions are in the first third. For the late-maturing species and varieties in the rest of the grain sector, with a focus on maize, we are now entering the crucial vegetation phase. The hurricane season with its changeable weather patterns is causing major concerns about future yields. In Canada, a more than average harvest is still expected.

In the European-Russian production areas of the Southern District and the Volga region, the harvest is in full swing. Good yields per hectare are predominantly reported for winter cereals. However, the low rainfall is causing problems for the summer crops. Losses are expected here. At a revised 83 million tons, the Russian wheat harvest is down considerably on the previous year (91.5 million tons).

China is forecasting rising maize and wheat harvests, while sunflowers, rice, sorghum and barley are expected to be cut back considerably in some cases.

India is expecting higher wheat, rapeseed and rice harvests, while other crops such as barley and sunflowers will have to take a back seat.

In the EU-27, the results vary greatly from region to region. In France, Belgium, Denmark and Germany, some harvests are expected to be significantly lower, while Spain is back to a good average after the disastrous previous year. In the Eastern European EU states, different harvests are expected in sub-regions depending on the amount of precipitation.

In the southern hemisphere, sowing for the new harvest has made good progress. In Australia, the area under cultivation has increased by 9% and the favorable rainfall is leading to high yield expectations. In Brazil, the second harvest of maize was completed with a good average result. Further increases are expected for the coming harvest in the first half of 2025. The increased sowing of wheat could bring the country closer to self-sufficiency. In Argentina, less maize is predicted, but more wheat and soybeans.

Following the brief spike in May to over € 265/t and the slump in June to € 220/t, wheat prices on the stock exchanges are showing a limited stable sideways movement in a range of € 220 to € 230/t wheat. Typical for the current season, changing information on the latest threshing results in the major harvesting regions is causing prices to rise and fall on a daily basis. It is the time of the so-called weather markets.

Although maize prices on the stock exchanges generally follow the price movements of wheat, their development is much more subdued. The critical phase is still to come at the end of July/beginning of August, when the yield-decisive grain formation phase takes place in the main production region, the USA.

Falling Russian export prices for wheat are currently setting the tone alongside harvest pressure from the USA. The importing countries along the African Mediterranean coast from Algeria to Egypt are keeping a fairly low profile with orders for the time being.