Signals in grain market remain contradictory

The signals in the grain market remain somewhat contradictory. A provisional memorandum between Iran and the US has cooled the oil market somewhat. The effect on the grain market remains rather limited. The weather is not cooling down in Europe either. 40 degrees is forecast for parts of France next weekend. The September wheat contract on the Matif closed yesterday €0.50 lower at €203 per tonne. On the CBoT, wheat fell 7 cents to $6.05¾ per bushel. Corn gave up 3½ cents to $4.17½ per bushel. Soybeans were the biggest loser in absolute terms, down 9¼ cents to $11.22¾ per bushel. There is quite a lot happening on the geopolitical front. The US and Iran have a provisional agreement to talk about peace and to open the Strait of Hormuz. Instead of a signing ceremony in Geneva today as previously agreed, Trump signed the memorandum of understanding in the Palace of Versailles under the watchful eye of the media and French president Macron. A historic place as the residence and power center of the Sun King, but of course also of the Treaty of Versailles, the agreement that formally ended the First World War in 1919. Contact The memorandum between the US and Iran has clearly had an effect on the oil market this week. Crude oil fell to its lowest level in three months. According to experts, it could still take months before oil exports from the Persian Gulf are fully back to prewar levels. And not unimportant is that the current agreement is only for 60 days. A lower oil price is not directly favorable for grain prices, although in recent months we have seen that a high oil price also did not have a one-to-one effect on grain prices. The European Union has officially made contact with the Kremlin for the first time in four years. That is the first time since the Russian invasion of Ukraine in 2022, when diplomatic ties were cut by the EU. According to experts, there will not immediately be anything noticeable from the European rapprochement with Russia. It is more an attempt by the EU to get to the negotiating table about ending the war between Russia and Ukraine. The weather remains another important factor in the grain market. It is warm here, but in France it is even worse. In some areas the mercury can reach 40 degrees according to the weather reports. According to experts, that will not cause problems very quickly for wheat and barley. Those crops are already so far advanced that the heat will not have much effect on the yield. It is different for corn. That crop is still growing at full speed and comes to a standstill because of the heat. Rain is forecast in the US. For winter wheat on the southern prairies that is not favorable with a view to preserving quality. Corn and soybeans in the Cornbelt could benefit from the forecast rain as could parts of the northern prairies where mainly spring wheat is grown. Local sources are warning of localized waterlogging in parts of the Midwest and the south due to heavy showers. The crops in America are not suffering from heat stress as the crops in France are. The temperature is around or below the long-term average. In South America, the weather is cooperating nicely for good yields. Reuters raised its corn yield forecast by 4% to 66.4 million tonnes. The Rosario exchange expects a corn harvest of 68 million tonnes in Argentina and the Buenos Aires exchange expects a yield of 64 million tonnes.