Heat and drought take their toll on European grains

It is increasingly becoming clear in the grain trade that this is costing yield. Cocerla, for example, has made a substantial adjustment to the yield forecast for the European grain harvest. In the US it is not much better if we look at winter wheat. For corn and soy the situation is less urgent. The September wheat contract on the Matif closed yesterday €1.50 lower at €214.75 per ton. On the CBoT we also saw a small correction downward of 5 cents to $6.35¼ per bushel for the September wheat contract. Corn closed 1½ cent higher at $4.41 per bushel. Soy was up 5 cents and came out at $11.96¾ per bushel. Coceral, the trade association of European grain processors and traders, has sharply lowered the yield forecasts for the EU and the UK compared with the previous forecast in June. In June Coceral was still counting on a corn harvest of 57.2 million tons. That has now been reduced to 52.7 million tons. Especially in southern France and Hungary, corn has suffered heavily from the heat we have had in recent weeks. There the corn was already flowering and to fill the cob properly it should have been cooler. In addition, drought naturally also plays a role. Coceral expects France to harvest 9.4 million tons of corn this season against 13.8 million tons last year. The corn harvest would therefore be the smallest in more than twenty years. Drought also hits wheat In wheat and barley, the hot and dry weather has also cost yield, says Coceral. The European crop of soft wheat is now estimated at 140.8 million tons against 143.7 in the June forecast. Last year the harvest came to 149.8 million tons. For barley the yield expectation has been lowered from 58.8 million tons in June to 57.6 million tons. Last year 63.8 million tons of barley were harvested. Spring barley is more affected by drought and heat than winter barley, writes Coceral. The total European grain harvest has been lowered by 9 million tons compared with the June forecast to 286.6 million tons. By comparison: last season 310 tons were harvested in the EU plus the UK. The Netherlands is not escaping the dance when it comes to lower yields. A 10% lower yield seems realistic. The Federation of Belgian Grain Traders (Fegra) tells Vilt.be that yields in winter wheat in Belgium are between 8 and 9.5 tons per hectare. Marc Ballekens, director of the Practical Centre for Agriculture and Horticulture in Roeselare, tells Vilt that he estimates the average more likely between 9 and 10.5 tons. The heat wave at the end of June cost on average a ton according to Ballekens. The winter wheat harvest is meanwhile well advanced in Belgium. By the end of this week the wheat in Belgium will probably be off the field. Two thirds of winter wheat harvested in America In the US the threshing of winter wheat is also going smoothly, according to the weekly Crop Progress report. 67% of the acreage has now been harvested against 62% last year this week and 61% in the five-year average. Now that the harvest is so far advanced, the USDA does not include figures on the condition of winter wheat. For spring wheat, 58% of the acreage receives a good or excellent rating. That was 57% last week and 54% last year this week. The recent rain has had an effect. Corn is also looking a bit better with 68% good or excellent compared with 67% last week. Last year at this time 74% of corn was rated good or excellent. For soy acreage, 65% receives a good or excellent rating compared with 64% last week and 70% last year this week. The hot weather now forecast for the US could still throw a spanner in the works. Both corn and soy are flowering and drawing heavily on soil moisture. The Wasde report, which overall was fairly neutral for the grain complex, has already been a little forgotten by the trade. Some traders do point out that the USDA is fairly optimistic about crop yields both in the US and in Europe and the Black Sea region. If that turns out somewhat disappointing, there could be room to the upside. Meanwhile, unrest in the Black Sea region leaves the grain trade cold. Russia has hit two bulk carriers in the port of Odessa. In response, Ukraine has shelled the Don-Azov canal with missiles. The canal connects the Sea of Azov with the River Don and is therefore indirectly via the river network the connection to the Caspian Sea. According to various sources, about a quarter of the Russian wheat exported goes through the canal.