Grain markets react to rain chances in the US

Not the unrest in the Middle East but the weather forecasts are putting their stamp on the grain market. Cold in Russia is not making the market nervous, but the possibility of rain in the US had an effect on the Chicago exchange during the previous trading session. Grain prices remain very weak from the growers' point of view. That does not apply to beef cattle in the US. The combination of grain cultivation and beef cattle is common there for farmers and that could bring a different dynamic. The May contract for wheat on the Matif closed yesterday €0.50 lower at €195.50 per tonne. On the CBoT wheat made a larger move downward and closed 5¾ cent lower at $5.99¼ per bushel. Corn posted a very modest gain of half a cent to $4.54¼ per bushel. Soy closed 10 cents lower and thus came out at $11.64½ per bushel. Brent crude oil was on the rise and closed yesterday again above $100 per barrel. The seizure of two container ships in the Strait of Hormuz by Iran had a clear effect on the oil market. On the grain market the move in the oil market was not followed. Outside the energy market it is cautiously assumed that there will still be some talks between the US and Iran. Growing well but cold Meanwhile, conflicting reports are coming out of Russia about the upcoming wheat harvest. Market agency SovEcon raised its yield forecast for the upcoming wheat harvest from 87.6 million tonnes to 89.7 million tonnes. The market agency is raising the estimate because the weather is cooperating well for Russian grain growers. SovEcon left the estimate for spring wheat unchanged at 23 million tonnes. The Russian news agency Ria, on the other hand, came with a warning that cold weather is causing delays in sowing spring wheat. Later sowing normally has a negative effect on yield. If we look at the forecast for minimum temperatures, it is clear that the frost is not over yet. Incidentally, this applies not only to Russia and Scandinavia, but also to the Baltic states and Belarus. On the other side of the Atlantic Ocean in the US, the chance of precipitation has increased somewhat in the fourteen-day weather forecast. Both for the south of the cornbelt and a strip below the Mason-Dixon line, May could start wetter than average. The really dry areas in western Kansas, Oklahoma and Texas are not expected to receive rain, or hardly any, according to the weather model. Farmers on the prairies are used to drought anyway. Where no crop is harvested, historically it is not unusual to leave a quarter of the wheat unthreshed because of too low yields and/or to graze the beef cattle there in winter. Historically high prices for slaughter cows could well be an incentive for farmers in the US to thresh less wheat and reserve a larger part for the cattle. In Argentina, arable farmers are preparing to sow winter wheat. Just like their colleagues in Australia, they are paying a lot of attention to the sharply increased fertilizer prices when making cropping plan choices. According to some sources, slightly less winter wheat is likely to be sown in Argentina. For the wheat that is sown, it appears that growers are choosing a lower nitrogen application. If that actually happens it could have significant consequences for the yield.