Cold returns, raising risks for Ukrainian wheat

After a milder period at the end of last week, the frost is returning to Ukraine. Now that the snow has melted, this could pose major problems for winter grains due to the cold weather, warns the Ukrainian farmers' union. In Russia, wheat has actually come through the winter relatively well. SovEcon thus made a significant increase in the yield forecast. However, the most dangerous period for wheat is yet to come, according to the market bureau. In the US, farmers for the upcoming season prefer soybeans over corn, as indicated by a Bloomberg survey. The March wheat contract on the Matif closed yesterday €0.25 higher at €190.75 per tonnes. On the CBoT, wheat showed a strong recovery in the last trading session and closed 9¼ cents higher at $5.47 per bushel. Corn moved more sideways and gained ¾ cent to $4.27 per bushel. Soybeans closed ½ cent lower at $11.33½ per bushel. The return of the cold after a thaw can cause significant damage to winter wheat and rapeseed in Ukraine. This is warned by the Ukrainian farmers' union UAC. Since the beginning of January, it has been cold, and various cold records have been broken. In the north, west, and parts of central Ukraine, the winter crops were protected from the worst cold. At the end of last week, the temperature rose, and the snow melted. As a result, water stood in the fields, and that water is now frozen. There are risks for both winter wheat and rapeseed, the UAC writes in a report. The union notes that weather risks can lead to significant adjustments in the harvest forecast. In Ukraine, approximately 4.5 million hectares of winter wheat and 1.1 million hectares of rapeseed were sown last fall. SovEcon raised the harvest forecast for wheat in Russia by 2.1 million to 85.9 million tonnes. The wheat in Russia is generally in better condition heading into the end of winter, writes SovEcon. Due to relatively high moisture in the soil last fall and more than enough snow this winter, the wheat in Russia is in good condition on average, according to the market bureau. The area of winter wheat has been increased by SovEcon by 200,000 hectares to 15.8 million hectares. This increase comes because fewer wheat crops have winter killed than previously predicted. The area is thus equal to last season. According to the Russian Ministry of Agriculture, only 3% of winter wheat is in poor condition. That is historically a small portion. Although winter wheat in Russia is in good condition, that does not necessarily mean that a good harvest will follow. The most dangerous period for winter wheat is from March to May, according to SovEcon. In recent years, we have seen that weather extremes have regularly occurred during this period, writes Andrei Sizov, director of SovEcon. The frost damage to Russian wheat in 2024 led to a price increase of 30% for wheat on the CBOT, Sizov adds. Corn is not KingIn the US, it appears that farmers have a slight preference for soybeans over corn for the upcoming season. At least that is the conclusion we can draw from a Bloomberg survey about acreage expectations in the US. The soybean area is expected to grow by 3.8 million acres, while 3.8 million fewer acres of corn will be sown. Corn is a relatively expensive crop for American farmers, and with prices around or below cost price, growers are opting for the cheaper soybean crop. However, it is a bit of a gamble to plant more soybeans, according to some analysts. In Brazil, the largest soybean producer, growers are heading towards a record harvest. The relationship between the world's largest soybean buyer, China, and the US is somewhat strained, to put it mildly. The trade war that Trump has unleashed is causing some uncertainty. This is also reflected in the figures for the throughput at the port of Los Angeles. In January, exports at the port, which is among the largest in the US, fell by 8%. That is the smallest export in three years. Exports of soybeans via Los Angeles fell by even 80% in January compared to the same month last year.