In the grain market, prices are going up and down, with a positive undertone for wheat. The harvest in the EU is going in fits and starts, in the US and Russia there are concerns about yields and quality.
The weather in the EU is developing unfavourable conditions for the barley and wheat harvest. In the long run, there is no major concern for the EU’s harvest in terms of volume, but the changeable weather slows progress. In France, a part has already been harvested, but work has now stopped again, possibly for 2 weeks. On the futures market in Paris, it does give the prices of the first-expiring wheat contracts (September 2021, etc.) a boost. However, there is also supply pressure from Ukraine, where 20% of the grain area has now been harvested.
The maize production area in the United States, among others, expects more favourable weather than now, with (very necessary) rain. The prospect of more buoyant weather with more moisture is yet to materialise, but created quite a bit of movement on the futures market last week. The wheat price is going up and down on the futures market in Chicago. After an initial upward trend in corn and wheat prices, these subsided as the week progressed. That also has to do with investor profit-taking due to the increased price level.
For wheat, the underlying price drivers remain. In the northern United States and in Canada, the situation with regard to spring wheat is and remains a concern. Russia reports smaller hectare yields of wheat than last year. The supply of wheat for the new harvest is also slowly starting, because it could start later than usual.
The agri-economic site Agrimoney does point out that the outlook on yield development in Russia may be too pessimistic. Short-term impact: Russia’s new wheat export tax, which is now variable, has been lowered somewhat compared to last week.