Grains News, 5th / Jul / 2024

The new harvest has started with interruptions. The initial results in the early threshing areas are still of limited significance in terms of quantity and quality, depending on the region and type of grain.

In its publication of June 27, the EU Commission confirms less wheat due to cultivation, but more feed grain in the form of barley and maize. Overall, the total harvest is estimated to be 1.5 to 2% higher than in the previous year. EU consumption remains largely unchanged. Exports are forecast to be just under 48 million tons, of which around 32 million tons will be wheat. Imports, with a focus on maize (18 million tons), will fall to around 28 million tons. Final stocks will fall marginally to 46.5 million tons.

The International Grains Council (IGC) lowered the global supply situation again in its end-Jun-24 issue. Increases in production and consumption balance each other out. The global supply figure falls back to 25% final stocks to consumption. In previous years, the supply figures have fallen continuously from 30% to 26%.

In its current July edition, the FAO has slightly increased global production and consumption compared to the previous month, but the supply situation is still estimated to be as tight as in the previous year.

Prices in the wheat sector are dominated by the smaller harvests in Russia and Ukraine and the rapidly advancing US harvest (15% ahead of the previous year).

Corn production is characterized by a reduced Brazilian harvest and a lower US harvest (-3%) due to acreage. The global supply situation in 2024/25 is rated more critical than in the previous year.

Government intervention is unsettling the market and prices: The Russian government is calling for minimum export prices with varying degrees of management and Turkey has imposed an import ban until mid-Oct 2024.

US wheat and corn inventories were 22% higher at the end of Jun-24.

The rollercoaster ride in stock market prices over the past few weeks appears to have stabilized at a reduced level for the time being.

Wheat prices on the Matif are hovering around the 225 €/t line for the delivery month of Sep.-24, while maize prices for the most frequently traded Nov.-24 date are at 205 €/t. These figures correspond to the long-term ratio of supply figures to price levels.

In Chicago, wheat prices have stabilized again after a previous rollercoaster ride. This is due to the advanced harvest, the results of which can be assessed with increasing certainty. Corn pricesfor the autumn months have stabilized at a reduced level. Thursday, July 4 was Independence Day and the stock exchanges were closed.

Observers will focus on the following regions in the coming weeks:

• The further results of the Russian harvest, which will also reach the critical northern regions as it progresses.
• The actual results in Ukraine, with a reduced harvest area and presumably lower yields per hectare.
• The different results in the EU-27 with significant harvest losses for the largest producer, France. Expectations in the Brexit country Great Britain are also significantly below the average of previous years.
• The other results of the US wheat harvest in the more northerly growing regions, which had less favorable starting conditions.
• The actual results of Canadian grain production, which was considered favorable.
• The impaired Chinese grain production with the consequence of possible import increases.
• In the southern hemisphere, planting dates are coming to an end: In Argentina and Australia, sowing conditions vary greatly from region to region.