European wheat market reacts to heatwave

The warm weather that is gripping large parts of Europe is also affecting the grain market. In the American Midwest, the crop-growing region par excellence of the US, growing conditions are excellent. It is hardly surprising that prices in Chicago came under some pressure. In Brazil, growers are expected to sow more soybeans next season. That is what AgRural writes in its first forecast for the coming season. The September contract for wheat on the Matif closed yesterday €6 higher at €207.25 per tonne. On the CBoT, wheat actually took a step back, falling 8¼ cent to $5.97½ per bushel. Corn also gave up some ground and closed 6 cent lower at $4.11½ per bushel. Soybeans followed the trend of the grains with a loss of 7 cent to $11.15¾ per bushel. Market participants in the grain market are paying close attention to the weather reports. Yesterday the JRC released the June edition of the Mars bulletin, in which the yield forecast for wheat in the EU was slightly lowered from 6.01 per hectare to 6 tonnes per hectare. A dry spring followed by a heatwave in May in parts of western, central and southern Europe has cost some yield according to the scientific office of the European Commission. For corn, sunflowers and beets, the yield forecasts were revised slightly upward. The JRC does note a reservation there, however. High temperatures and limited rainfall forecast until the end of June in large parts of western and central Europe will worsen stress on crops and may threaten yields, writes the JRC. And it will be hot this week if we look at the European temperature map. The heat in our own country has also reached the general media, as has the warmth in France. But high temperatures are also forecast in countries such as Germany, Hungary and Slovakia. It is logical that the European wheat market is reacting to this somewhat. How different the mood is in the US. It is still fairly dry on the prairies, but the Midwest states are experiencing reasonably good growing weather. Heavy showers have caused local problems, but overall corn and soybeans in the US are in good shape. This is also clear from this week's Crop Progress report. 68% of corn is rated good or excellent and 66% of soybeans. That is unchanged from last week for both corn and soybeans. The winter wheat harvest is progressing well so far. 40% of winter wheat in the US has been threshed compared with 25% last week and 18% last year at this time. In Oklahoma the harvest is furthest along, with 95% harvested. The condition of winter wheat has deteriorated slightly. Last week, 27% of the acreage received a good or excellent rating. This week that is 26%. Last year at this time, 49% of the winter wheat acreage still received a good or excellent rating. Of spring wheat, 54% receives a good or excellent rating compared with 55% last week and 54% last year at this time. While analysts in the northern hemisphere are mainly busy with the harvest, AgRural came out with an initial acreage forecast for 2026/27 of soybeans in Brazil. The market bureau estimates the acreage at 49.006 million hectares. That is growth of 0.9% compared with last season. If this is realised, it would be the twentieth year in a row that soybean acreage increases. It is also the smallest growth in those twenty years. Rising costs and margins that are under considerable pressure for growers, and an upcoming El Niño this autumn, are making farmers more cautious according to AgRural.