The grain market is a weather market, affected by both drought and rain. In the United States, spring wheat yields have been significantly reduced. And yield expectations in Russia and the EU disappointing.
The price of the September 2021 wheat contract on the Paris futures market rose smoothly in the second half of last week. The weather is very changeable in Europe, which hinders the wheat harvest in France and Germany. Even on weekends, everything possible is being done to bring in the wheat.
Market bureau Agritel reports that the requirements with regard to the humidity level have been forced to relax a bit. The hectare yields are average and so far have been disappointing compared to the high expectations. Despite the fixed mood, buyers such as Egypt and Algeria are now back on the market.
On the futures market in Chicago, wheat prices are again at a high level. The main driving factor here is the expectation that yields per hectare of spring wheat in the United States will be very disappointing compared to previous years.
In parts of Russia, especially the central and areas along the Volga, wheat yields are also less than expected. Russian wheat production is now estimated at 80 million tons, while the latest estimate by the US Department of Agriculture is still 85 million tons. The Russian statistical office also indicates a smaller area of winter wheat than the data from the USDA, among others. Bureau IKAR puts the forecast of the Russian wheat production at 78.5 million tons, last month it was 81.5 million tons.
The corn market is also fixed, not just for the old harvest. In the US, forward prices are now lingering; there has been rain in the maize areas and the weather forecast also looks favourable, at least for the eastern part of the corn belt. A return of warm and dry weather is expected for the west and north.