Weather premium in wheat market is rising

Drought in the US has been playing a role for some time in the important wheat regions. Rain is now forecast for the south, but that precipitation will not come at the desired time. With the harvest underway, it would have been better if it had stayed dry. In Europe, we can expect a warm period. Especially in France, wheat is now moving quickly according to sources. Besides the weather issues, there is also quite a bit of international demand for grain this week. The September wheat contract on Matif closed yesterday €1 higher at €203.50 per tonne. On the CBoT, wheat closed 16¾ cents higher at $6.12¾ per bushel. Corn gained 7¼ cents to $4.21 per bushel. Soy also ended in the green but with 2 cents the rise was somewhat more modest than in grains. Soy thus came to $11.32 per bushel. The weather forecasts are clearly the driving force behind the rally on the wheat exchange in Chicago during the last trading session. Quite a lot of rain is expected for the south and the Midwest of the US. Not only will this delay the winter wheat harvest, but rain on ripe wheat is of course also not good for quality. There is a fairly large speculative element in the jump that wheat made, several analysts warn. For corn and soy, the precipitation is coming at a favorable time, although storms are being warned of in places such as Iowa and Illinois. On the northern prairies in the US, where a lot of spring wheat is grown, it remains mostly dry. In combination with the warm weather forecast there, those are not the most ideal growing conditions. Heat in Europe too We are also dealing with heat in Europe. In our country, but also in Germany and Poland, the warm weather forecast until the end of this month is something to keep a close eye on in relation to grains. In Southern Europe, the crops are already so far along that there is little more to worry about, several experts say. Besides the weather, a tender from Algeria also created a somewhat more positive mood. This week the country secured between 600,000 and 780,000 tonnes of wheat in a tender. The largest part of that comes from the Black Sea region according to various sources. The price would be around $265 per tonne C&F. Jordan bought 60,000 tonnes of feed barley in a tender for $252 per tonne C&F. The USDA announced yesterday a flash sale of 372,000 tonnes of soy to unknown destination. Of that, 60,000 tonnes are from the old crop and 312,000 tonnes from the new crop. However, that news was not enough to really support the soybean price. The trade is not sufficiently convinced that demand for soy is really picking up. Unknown destination can of course mean China, but players in the soybean market seem to be waiting for a little more clarity on that.