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Weather woes for corn and wheat

Grain markets have firmed up over the past week as weather concerns continue to threaten global corn and wheat production.

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ADM Agriculture's Jonathan Lane
ADM Agriculture's Jonathan Lane

In his latest market report, Jonathan Lane, head of grain trading at ADM Agriculture, pointed out that ongoing dryness in the US northern plains, Canadian prairies and parts of the Black Sea region is continuing to threaten spring crops, while rain in the EU and western parts of the Black Sea region is raising concerns over final quality.

 

“With further downward production estimates expected for Brazil’s corn crop, and the slow pace of the Argentine harvest, extra demand could come back into the US, placing greater emphasis on new crop weather,” he explained.

 

Early reports from Russia show yields are lower than expected, leading analysts to begin trimming back production numbers.

 

European harvests have started around 10 to 14 days later than normal, and this has delayed shipment of new crop supplies into the UK, causing spot premiums to firm as domestic supplies tighten.

 

“UK new crop is now all about weather, how crops yield and overall quality,” said Lane. “Increased domestic demand should provide price support, but talk of a larger percentage of the EU crop potentially only being of feed quality could pressure the UK market.”

 

The USDA projected a lower-than-expected US wheat crop in this week’s report as a sharp fall in spring/durum production more than negated a slight rise in winter wheat. The carry-out for 2021/22 is seen at a 13-year low.

 

Brazil’s National Supply Company (CONAB) reduced its estimate of the country’s 2020/21 corn crop to 93.4 Mt, as drought and frosts continue to threaten.

 

Buenos Aires Grain Exchange reported Argentine wheat sowings as 91% complete as of 8 July, with an expected area of 6.5M-ha seen producing a 19 Mt wheat crop.

 

Ukraine’s 2021 wheat crop is now put at 29.5 Mt as recent precipitation has helped the crop, although excess rains in some areas could herald a larger proportion of feed quality wheat.

 

Russian farmers have harvested 2.5M-ha of wheat as of 13 July, with average yields pegged at 3.28t/ha, down from 3.36t/ha this time last year.

 

The amount of France’s soft wheat crop reported as in ‘good’ or ‘very good’ condition held at 79% in the week ending 5 July. The country’s soft wheat crop is expected to rise 27% on the year to 37.1 Mt.

 

Grain harvests have started in Germany, but have been stalled repeatedly by heavy rainfall. Harvest output has been trimmed to 44.2 Mt, included 22.8 Mt of wheat.

 

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