Wheat has been volatile on the Matif so far this week, but is firmer on balance. The closing price yesterday (Thursday) was 205.75 euros, 2.25 euros/t higher than last Friday. Corn also gained, rising from EUR 194.50/t in the front month of June on Friday to EUR 197.25/t yesterday. On the CBoT, wheat and maize moved in the opposite direction and have been weaker so far this week.
In Europe, continued weak export demand is a burden. FranceAgriMer recently reduced its French export forecast for the current season by 500,000 tons to 10.0 million tons. There are also reports of weak demand from ports in Germany. The EU Commission has not published current export figures since March 27. Technical difficulties are still causing problems. Most recently, wheat export volumes were slightly down on the previous year. The fact that Egypt recently ordered 120,000 tons of wheat from Ukraine also depressed the mood. Overall, however, the domestic market is being bolstered by improved demand from the animal feed industry and the prospects for the coming harvest are also supporting the market. In southern Germany in particular, but also in the north, producers are satisfied with the development of stocks. However, there are concerns that the plants have not rooted deeply enough due to the high rainfall and are therefore susceptible to a longer dry phase. Condition ratings in France have recently been lower than they have been for four years. In contrast, the condition ratings in the USA are slightly better compared to the average of the last five years. The weather outlook has also improved, particularly in the Great Plains.
According to ICAR and Sovecon, export prices in Russia have once again strengthened slightly, but overall Russian exports have reportedly lost momentum. US export demand is also weak and disappointing for the most part. The recent strengthening of the dollar is limiting competitiveness and, in addition to the strong international competition, continues to weigh on export expectations.
The International Grains Council (IGC) adjusted its forecasts for the coming harvest on Thursday. Compared to the March forecast, the wheat estimate was reduced by 1 million tons to 798 million tons. Ending stocks are reduced by 3 million tons and are expected at 259 million tons. Compared to the preliminary figures for 2023/24, however, wheat production will be a good 9 million tons higher. The IGC expects maize production to reach 1.226 billion tons. This is 7 million tons less than previously expected, but production is still likely to be higher than in 2023/24.
Many market participants are turning their attention to Argentina, especially for maize. The grain exchange in Rosario, Argentina, warned of crop failures due to an insect infestation. The Rosário Grains Exchange had already cut its production forecast by 6 million tons last week.
ZMP Live Expert Opinion
The weather is increasingly playing a role in price expectations in the northern hemisphere. However, production estimates for the coming harvest are also becoming more numerous and indicate lower wheat production, at least for Europe. Globally, the harvest is likely to be at least as high as this season. In the case of maize, the ongoing harvest work in South America and the generally good global supply situation are having a negative impact. However, as this week also shows, the news is always good for surprises and volatility.
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