Wheat prices possibly further pressured next spring

According to the new MARS Bulletin, wheat is generally performing well across most of Europe .A point of concern is that the wheat is barely or not winter hardy. In the US, farmers are nearly finished with the corn harvest and the sowing of winter wheat, according to the latest Crop Progress report for this season. Saudi Arabia has made a significant move in the wheat trade. The December contract for wheat on the Matif closed unchanged at €189.75 per ton yesterday. In Chicago, wheat was the biggest loser, down 4¾ cents to $5.22¼ per bushel. Corn also lost some value but kept the loss limited to 1¾ cents at $4.23¾ per bushel. Soybeans also closed 1¾ lower at $11.23¼ per bushel. Winter grains and rapeseed in Europe are generally doing well. This is largely the message of the MARS Bulletin published yesterday by the JRC, the scientific office of the European Commission. Thanks to sufficient dry days during the autumn, sowing could be done on time, and the planned area for winter crops is about in the ground. However, there are also several regions within Europe where there are concerns. In central Italy, eastern Hungary, and western Romania, it is dry. According to the JRC, there was 25% to 50% less rain compared to the multi-year average. In southern Romania and Bulgaria, there was significant rain at the beginning of October. It has since become somewhat drier, but there is still a considerable backlog in the sowing of winter grains. Just outside Europe, in North Africa and Turkey, farmers are dealing with drought. Winter hardinessDue to the relatively mild weather this autumn, the winter grains are quite well developed. However, this poses a risk. The winter grains in large parts of Europe are barely or not winter hardy at all. In the Benelux, France, and Germany, most wheat is not winter hardy yet, whereas last year around this time, many larger areas had already partially hardened off. The same applies to a large part of the winter grains in southeastern Europe. So far, this is not a problem, but if it suddenly becomes seriously colder, the chances of winter kill are relatively high. The model used to calculate winter hardiness does not take into account the late-sown wheat in southeastern Europe, the JRC writes. The sensitivity to winter kill could therefore be greater in Bulgaria, Romania, and Ukraine. Source: JRC MARS Bulletin The USDA from America has released the latest Crop Progress report for this season. The corn is nearly all in, with 96% of the area harvested. However, the threshing is somewhat behind schedule. The five-year average for this week is 97%, and last year farmers were already done with the corn harvest. The sowing of winter wheat is progressing nicely according to schedule. Of the planned area, 97% is in the ground, which is equal to last year and the five-year average. 87% of the wheat is above ground compared to 89% in the five-year average. Due to precipitation in the southern prairies, the status of the winter wheat has improved somewhat this week. Of the area, 48% now receives a rating of good or excellent compared to 45% last week. A year ago this week, 55% of the winter wheat in the US was rated good or excellent. Sharp prices in tenderIn addition to the more technical cultivation matters in the MARS Bulletin and Crop Progress report, it was announced yesterday that the Saudi Arabian state buyer GFSA has secured 300,000 tons of wheat in a tender. The majority of the wheat is reportedly coming from the Black Sea region, although a portion of the volume would include cheap wheat from the new harvest in Argentina. Prices in the tender reportedly range from $258 to $260 C&F (cost and freight) for delivery in March. Some analysts call these prices 'aggressively low'. In the current market, it is said that you could pay up to $8 more for replacement wheat. The sharp bids in the tender from Saudi Arabia could indicate that traders expect that due to the ample supply of wheat, prices could be further pressured next spring.