France heads for smallest harvest since 1976

It remains unsettled in the Black Sea region. That should provide support to the European wheat market. Because Russia is turning the price knob sharply due to export problems, the effect on the Matif is limited. In France, corn is disappointing. Some analysts are already talking about the smallest harvest since 1976. In the US, the USDA is tempering expectations for corn and soy somewhat in the latest Crop Progress report. The September wheat contract on the Matif closed yesterday €2.75 lower at €225.25 per tonne. On the CBoT, wheat closed unchanged at $6.74¾ per bushel. The September wheat contract rose 6 cents to $4.65 per bushel. Soy was also in the green and closed 23¼ cents higher at $12.01 per bushel. The developments in the Black Sea region should reasonably provide support to the European wheat market. Two large grain terminals in the deep-sea port of Novorossiysk in Russia are still out of operation after attacks by Ukraine. Partly because of this, Russia is having trouble exporting grain. SovEcon expects Russia to export 2.2 million tonnes of wheat this month. If that forecast comes true, it would mean the smallest export for this month since 2010. The limited export options are also affecting the wheat price on the Russian market. Ikar lowered the quotation by $5 to $215 per tonne. In that light, it is perhaps not so surprising that European trading on the Matif is somewhat cautious. Underlying all this, something has changed in the wheat market, several analysts say. The idea that we would have a season with ample availability of wheat and grains in general has now given way to some concerns about tighter supply. Partly because grain from the Black Sea region is less readily available due to logistical problems. The fact that yields in Europe and North America are not entirely disappointing is another factor. Corn harvest halved in France In France, according to FranceAgriMer, 29% of corn is in good or excellent condition compared with 31% last week. In its latest forecast, the European Commission was still expecting a European corn harvest of 51.9 million tonnes, the smallest harvest since 2007. Several analysts are now already assuming that the harvest will fall below 50 million tonnes. That would be the smallest harvest since 1990. The French Ministry of Agriculture expects a harvest of around 9 million tonnes of corn for France. That is 35% less than last season. Analysts at Expana and Argus think that estimate is still too optimistic and expect the French corn harvest to be halved compared with last season to 7 million tonnes or less. That would be the smallest harvest since 1976. Rapid harvesting of spring wheat In the US, the wheat harvest is progressing rapidly, according to the weekly Crop Progress report from the USDA. 96% of the winter wheat acreage has been harvested. Of the spring wheat, 41% has been threshed compared with 24% last week and 34% in the five-year average for this week. The condition of spring wheat improved slightly, with 52% of the acreage now rated good or excellent compared with 51% last week. On the southern prairies in states such as Kansas and Oklahoma, significant rain fell last weekend. That arrived just in time to build up a bit of moisture in the soil again before winter wheat goes into the ground for the coming harvest. Corn continues to grow The first corn is meanwhile mature. To be precise, 4% of the acreage, according to the Crop Progress report. Last year at this time and in the five-year average, that figure was 3%. The condition of corn has deteriorated slightly. 60% is rated good or excellent compared with 61% last week. By comparison, last year at this time 71% of the corn acreage was rated good or excellent. Soy is somewhat ahead in development compared with other years. On 85% of the acreage, the plants are in pod filling. Last year and in the five-year average at this time of year, that figure was 80%. As with corn, the USDA slightly lowered the rating for soy. 61% is rated good or excellent compared with 62% last week. This week, the Pro Farmer Crop Tour starts in the cornbelt. Analysts expect wet and muddy conditions especially in the eastern cornbelt. The recent rain was welcome in the western cornbelt, but in the east the precipitation probably did more harm than good according to some sources.