€250 per tonne within reach in the wheat market

The wheat market moved sharply higher during the past trading session. According to analysts, concerns about the availability of wheat from the Black Sea region are an important driver. Due to attacks by both Russia and Ukraine, shipping traffic has been severely disrupted. In the US, the Wheat Quality Council Crop Tour is assessing spring wheat fields. Yield estimates from the tour are considerably lower than the USDA estimated earlier this month.The September wheat contract on the Matif closed yesterday €10 higher at €244.75 per tonne. On the CBoT, wheat closed 28¼ cents higher at $7.06¼ per bushel. Corn gained 9 cents, bringing it to $4.61¾ per bushel. Soybeans were also in the green, up 13¼ cents to $12.32¾ per bushel.Two straits are playing an important role behind the rally, especially in the wheat market. The first regularly makes headlines in the mainstream media, the Strait of Hormuz. Due to the fighting between the US and Iran, shipping traffic to and from the Persian Gulf has been severely disrupted for over a week and a half now. This primarily affects the oil price, but grain markets are also feeling the effects indirectly.Kerch StraitThe Kerch Strait has received far less attention, but there is also unrest there. It is the strait between the Black Sea and the Sea of Azov, where the Crimea Bridge is also located. Following Ukrainian attacks on vessels in Russia's shadow fleet, shipping to Russia's main grain terminals on the Sea of Azov is being disrupted. The Kremlin has even been forced to halt shipping traffic around certain strategic points at night. Meanwhile, the Ukrainian ports have also not become more accessible due to Russian attacks.Although the focus is now more on exports, concerns about fuel shortages in Russia also remain. The exact consequences for agriculture are still difficult to estimate, but it is almost certain that Russian farmers are being affected. Farm machinery depends on diesel.Drought on the prairiesIn the US, the first results from the Wheat Quality Council's North Dakota spring wheat tour are known. In the southern part of the state, 86 fields were visited and the expected average yield comes to 46 bushels per acre. Last year, the average yield along the same route was 50 bushels per acre. In its latest forecast earlier this month, the USDA was still expecting an average yield of 58 bushels per acre against 55 bushels in 2025.Until about ten days ago, our outlook was better, said Jim Peterson, director of the North Dakota Wheat Commission, during the Crop Tour. The heat has certainly taken a toll on the crop and we will see what impact that has on the yield. Peterson also notes that farmers in North Dakota grow many other crops. Farmers now grow a much wider range of crops. As a result, wheat is no longer as dominant as it was ten years ago. The differences between the fields are very large. The best and the worst field visited were only 10 miles (approximately 16 kilometres) apart. Some scouts who also took part in the tour in Kansas in May said the conditions resembled the drought damage they saw there.