Concerns about Black Sea wheat supply

The war in the Black Sea region is once again weighing on the grain market. Russian and Ukrainian attacks on each other’s ports are increasing concerns about the availability of Black Sea wheat. June's heat in Europe also appears to have reduced yields more than expected.The September contract for wheat on the Matif closed yesterday €0.50 higher at €235.25 per tonne. On the CBoT, wheat took a small step back, down 8¾ cent to $6.74 per bushel. Corn also closed in the green, up 4¾ cent to $4.49½ per bushel. Soybeans moved up even a little more strongly than corn, gaining 21½ cent to $12.26 per bushel.During harvest, the wheat price usually falls somewhat because fresh supplies come onto the market. This season, the market in Europe is not following that pattern. That is mainly caused by concerns about the availability of Black Sea wheat. Ukraine reports that a vessel carrying corn near Odesa was hit by a Russian missile. Ten people were killed in the attack.Following Ukrainian attacks, the Sea of Azov is difficult or impossible to access for ships looking to load grain in the Russian deepwater ports there. Due to the logistical problems, SovEcon has lowered its export forecast for Russian wheat in July by 500,000 tonnes to 1.5 million tonnes, compared with the 2.65 million tonnes that Russia exported in June. That would be the smallest wheat export for Russia since 2017.Meanwhile, Russian wheat prices continue to rise. SovEcon sets the quotation at $238 to $241 per tonne, $9 to $12 higher than a week earlier. Ikar raised its quotation by $7 to $235 per tonne.Drought costs more yield in FranceCloser to home, in France, wheat yields are not entirely meeting expectations. The June heatwave appears to have reduced yields more than previously expected. Argus estimates the French wheat harvest at 30.8 million tonnes. That is 7.6% less than last year. The multi-year average for the French wheat harvest stands at 33 million tonnes.The conflict between Iran and the US is also indirectly supporting the grain market, according to some analysts. For a tenth consecutive day, there have been attacks from both sides. Brent oil is edging toward $90 per barrel amid all the unrest.Wheat in the US under some pressureIn the US, a relatively expensive dollar and a smooth winter wheat harvest are putting some pressure on the wheat market. According to the latest Crop Progress report, 74% of winter wheat in the US has been harvested. Last year at this time that was 72%, and the five-year average stands at 71%.The condition rating for US spring wheat declined this week. 53% of spring wheat in the US is rated good or excellent compared with 58% last week.The Wheat Quality Council started its spring wheat crop tour in North Dakota yesterday. It is dry, but on the other hand disease pressure is low. Tour participants say the crop looks promising. The crop does appear to be maturing more quickly because of the dry conditions.The Crop Progress report also shows that the USDA has not made major changes there. Of the corn acreage, 67% is rated good or excellent compared with 68% last week and 74% last year at this time. Soybeans are rated good or excellent at 45% compared with 44% last week and 57% good or excellent at this time last year. The warm weather forecast for the northern prairies and the western Corn Belt, combined with little or no rain, is causing concern among some analysts. Temperatures of around 35°C are not ideal for corn and soybeans currently in the flowering stage.