The grain markets have been volatile this week. There was often a wide trading range to the north on individual days, but the bottom line was that by the closing bell yesterday evening, contracts had barely made up any ground on last Friday's price. Corn was more stable there. Wheat is starting the last trading day of the current week in Paris today with premiums again. The closing price in the front month Sep. 24 was 248.50 euros/t yesterday evening. At the peak of trading yesterday, however, 256.50 euros/t were already registered. Front month June 24 maize closed yesterday with marginal gains at EUR 213.25/t, but was EUR 5.50 higher than on Friday of last week.
The focus is increasingly turning to the coming harvest. Last Friday's WASDE report certainly provided support for wheat prices. Global production is likely to be higher than in 2023/24, but ending stocks are falling due to increased demand. While the harvest outlook in Canada and the USA is brighter than in the previous year, the USDA expects a lower wheat harvest in Europe, but higher maize production. This is also in line with the EU Commission's latest assessment. In addition to the production outlook, however, the weather is increasingly playing a role. The Russian analysts IKAR and Sovecon have repeatedly been forced to reduce their harvest volume forecasts due to the weather conditions, particularly in central Russia with frosts. The forecasts are now below the 90 million tons mark. Strategie Grains has increased its forecast for Europe by 1.7 million tons of soft wheat. Spain and Romania in particular are showing better yield potential, while France is likely to harvest its smallest wheat crop since 2021. The Federal Statistical Office announced in a press release yesterday that the winter wheat area in Germany has decreased by 8.3% compared to 2023/24. The area under cultivation is estimated at 2.6 million hectares. On the other hand, around 1.3 percent more area will be used for barley. Oats, spring barley and grain maize are also increasing in cultivation. It is striking that the area planted with spring wheat has more than tripled due to the many changes in the winter. While 30,400 hectares were used for spring wheat last year, this year's figures from the Statistical Office show that this figure is 99,900 hectares, an increase of 228.5 percent. Based on a three-day field tour in the USA, experts are assuming that yields will be significantly better than initially thought. In Kansas, yields are even expected to double compared to the previous year. The US export figures for both wheat and maize have recently been disappointing. Corn sowing has made good progress recently, but is likely to slow down again somewhat in the coming week due to rainfall in the Corn Belt.
Hardly any old crops are being traded on the cash markets in Germany, although feed barley in particular is still in demand. Producers and traders are increasingly focusing on contracts for the coming harvest.
ZMP Live Expert Opinion
Even though wheat has trended sideways this week, the current market situation shows that the mood is sometimes friendly. The global supply situation is estimated to be tighter, as the USDA figures show. In France, the area under cultivation is small and the condition is still below average. According to all available information, Russia's harvest is likely to be smaller.
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