Wheat market more driven by harvest than wars

Geopolitical developments are not really gaining a hold on the grain market. Attacks by Israel and Iran in the Middle East and between Russia and Ukraine provide little support. In the US, the wheat harvest is underway, which can sometimes put some pressure on the market. Meanwhile, Egypt has no shortage of wheat supply from the local harvest. The September contract for wheat on the Matif closed yesterday €0.75 lower at €200.75 per tonne. On the CBoT, wheat was slightly higher and closed 3¼ cents up at $5.83¼ per bushel. Corn was also in the green, rising 1¼ cent to $4.18¾ per bushel. Soybeans, unlike the grains, closed lower on the Chicago exchange. The July soybean contract lost 5¾ cents to $11.15¾ per bushel. The signals in the grain market are mixed. Oil was on the rise yesterday morning because of Israel's attacks on Iran. The grain market did not follow that path. Ukraine launched a drone attack on the Russian Novorossiysk grain terminal in the early hours of Monday. The Russian news agency Interfax reports that the damage is limited. Yury Medvedev, director of the terminal, told Interfax that work can continue as normal. Ports under fire The Novorossiysk terminal, located on the Sea of Azov, is one of the largest ports in the Black Sea region. The grain terminal has a storage capacity of 250,000 tonnes and ships with a carrying capacity of 72,000 tonnes can be loaded there. In the first four months of this year, the terminal processed 2.07 million tonnes of grain, compared with 1.8 million tonnes over the same period last year. Just before the weekend, Russia carried out a drone attack on the Ukrainian port of Chornomorsk. This caused damage to the Kernel terminal. Part of the infrastructure for grain storage and processing was damaged, leading to product losses and disruption of terminal operations. The associated warehouse facilities were also partly destroyed. Most importantly, none of the staff were injured, the company wrote in a statement. While our grain harvest has yet to begin, Egypt is halfway through the harvest. The Egyptian government has now bought 4.5 million tonnes of wheat from local farmers, Reuters reports. The current season shows an unprecedented increase in wheat deliveries and the government is expected to exceed its procurement target, says Ahmad Idam, head of services at the Egyptian Ministry of Agriculture. The goal is to secure 5 million tonnes of wheat, and halfway through the harvest season, which runs from 15 April to 15 August, Egypt is already at around 90% of that target. Fast harvest In the US, the wheat harvest is also progressing relatively quickly. 11% of the winter wheat area has been harvested, compared with 4% this week last year and 6% in the five-year average, according to the weekly Crop Progress report from the USDA. The condition of the winter wheat still standing has deteriorated slightly this week. 25% of the area is rated good or excellent, compared with 26% last week. Some analysts are somewhat concerned about the locally heavy showers that have moved into the western part of the wheat belt. That could cause quality problems in wheat that is (almost) ripe. Rain good for corn Further northeast in the cornbelt, growers are pleased with the rain that has fallen. The precipitation is very local, but some parts of the cornbelt received over the past weekend the amount of rain that normally falls in the entire month of June. US growers are almost finished planting corn. 97% of the planned area has been planted. Of the corn planted, 86% has emerged. That is the same as this week last year and the five-year average. Corn condition is decent and unchanged from last week, with 57% of the area rated good or excellent. Last year at this time that was 71%. Of the planned soybean area, 92% has been planted compared with 88% in the five-year average. 65% is rated good or excellent, compared with 66% last week and 68% this week last year. Screwworm fly in Texas The sale of 224,000 tonnes of US soybeans to an as yet unknown destination and 103,000 tonnes to Japan had only a limited impact on the market. Two new cases of the screwworm fly (New World screwworm) in Texas are weighing on sentiment. Traders and analysts fear that the animal disease could affect exports of US agricultural products.