The climatic conditions in most production areas currently largely determine the development of grain prices. The trend is moderately positive across the board.
The upward trend in wheat prices in the last 2 weeks is largely due to concerns about the climatic conditions on the American continent. It is cold in the US and dry in the Midwest, which is depressing the emergence and growth of the wheat and could lead to less acre yield later this year.
Concern about the weather also pertains to maize, the crop that has largely shaped the state of the grain market as a whole for a year now. Of particular importance are the unfavourable conditions for sowing maize in the United States, which is behind last year, and the development of the harvest (safriña) in Brazil, which is suffering from the drought.
The German Cooperative Association estimates the 2021 wheat harvest in Germany at 22.63 million tons. That is 2.2% more than in 2020. Wheat in France is in good shape, although the percentage that earns the qualification “good to excellent” has fallen slightly to 86%. A lack of rainfall is expected for the coming week.
The UK has a very tight wheat balance, according to Agrimoney. The agro-economic site reports that it looks like closing stocks this season will be below the level seen as an acceptable minimum. According to Agrimoney, this implies that in July the British will start importing wheat from the new EU harvest, which is expected to be about 10 million tonnes larger than the 2020 harvest. There is not much to say about volumes, apart from the expectation that demand will increase for animal feed, human consumption and industrial use as the Covid-19 restrictions will relax.
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