The US crop areas report released this week by the USDA came in below average trade estimates.
Maize (corn) was put at a fraction over 92M acres, just over 3M acres below the average estimate. Soya beans were posted at 83.8M acres, 900,000 acres below estimate, while the all-wheat area was estimated at 44.25M acres, 470,000 acres below estimate.
Jonathan Lane, head of grain trading at ADM Agriculture, commented: “Managed money funds held a significant 277,479 contract-short position on CBOT corn as of 26 June. This, combined with the shortfall on trade expectations, moved the main corn markets higher, which also helped wheat appreciate.”
As the wheat harvest in the US progresses and Europe gets under way, the eyes of the industry continue to watch the weather before harvested grain is secured under cover.
“NASS [US National Agriculture Statistics Service] reported the US winter wheat harvest was 41% complete, up from last week’s 29%, in line with the five-year average,” Lane wrote is ADM’s latest market report.
“Early European yields and quality are variable, dependant on area, but owing to being early in the campaign there is much to still await before the crop is truly defined.
“EU Paris futures, having traded to contract lows last week, found support from the rallying US corn and wheat markets to trade €3-4/t higher than this point last week.
“The EU Commission cut the import duty on maize to €4.65/t from Tuesday this week, following the slight rise in global import prices.
Meanwhile, the recent cooler, damper weather pattern across the UK, following a significant hot blast last week, has calmed talk of more potential dryness induced crop losses. “However, it is too late for many crops to benefit significantly,” said Lane.
In other news, Russia’s agriculture ministry said that the country will not replenish its stockpile of grain in the new season and domestic reports of bigger-than-expected crops are limiting chances of an export quota.