Drought is a spoiler for grain in Ukraine

Timely sufficient water can make a big difference in the yield of a crop. This is evident from the report that the JRC published about Ukraine, which shows a clear divide across the country. The grain export in Ukraine is not progressing very well. In contrast, the US has built up a significant lead in wheat export. The harvest of corn and soybeans is gaining momentum in the US, as shown in the new Crop Progress report. The December wheat contract on the Matif closed yesterday €1.25 higher at €191 per ton. On the Chicago exchange, the December contract also closed with wheat up one and a half cents to $5.25 per bushel. Corn took a step back in the last trading session, closing 6¾ cents lower at $4.23¼ per bushel. Soybeans also closed in the red, but the loss was limited to a decline of 3½ cents to $10.42¾ per bushel. Export continues to be a hot topic in the grain market. Ukraine, like the EU, is struggling to find buyers. The grain export for the current season (which starts on July 1) is running 40% behind last season. According to the Ukrainian Ministry of Agriculture, 5.2 million tons of grain have been exported compared to 8.6 million tons during the same period a year earlier. Wheat, with 3.6 million tons, is the largest export product so far, but the export is 24% behind compared to last season. Additionally, Ukraine has exported 692,000 tons of barley, 40% less than last season, and 891,000 tons of corn, 64% less compared to a year earlier. DivisionThe scientific bureau of the European Commission, the JRC, published a Mars bulletin yesterday on the progression of the growing season in Ukraine. Unevenly distributed rainfall has resulted in significant differences in crop yields. In western Ukraine, sufficient rain has fallen, and expected yields are above the multi-year average. In the eastern regions, the JRC expects that a lack of moisture in corn and soybeans has cost tons. The Ukrainian market bureau APK reported, whether coincidentally or not, that in 60% of the area where farmers would like to sow winter grains, it is too dry, and therefore farmers are waiting for rain. In Russia, the wheat price is under some pressure, reports market agency Ikar. The quote for wheat for export with at least 12.5% protein has been reduced by $3 to $225 per ton FOB (delivered on board the ship). Despite the slightly lower price, the Kremlin is looking to increase the export duty on wheat, several sources report. While on our side of the Atlantic Ocean export is not really getting started, the wheat export from the US is going very well. Since the start of the new season (which the USDA holds to June 1), 7.86 million tons of wheat have been exported. This is 12% more than the same period a year earlier. Combines converted to corn and soybeansThe harvest of summer wheat and barley is almost complete in the US, according to this week's Crop Progress report. 94% of the summer wheat has been harvested and 95% of the summer barley. American farmers are slightly lagging in sowing winter wheat. 11% of the planned area has been planted compared to 13% of the area sown this week in the five-year average and last year. The American farmers are on track with the corn harvest. 7% of the total area has been harvested. This is in line with the five-year average, but at this time last year, 8% had been harvested. The condition of the corn has slightly declined with 67% of the area receiving a good or excellent rating compared to 68% last week. Harvesting of soybeans has also begun. 5% of the area in the US has been harvested compared to 3% in the five-year average and 6% last year this week. 63% of the area received a good or excellent rating compared to 64% last season.