Analysis Grains
Criticism on export figures absence in wheat rally
The European Commission has not published export figures for almost a month and a half, while they normally come weekly. This is particularly unfortunate according to analysts now that the Matif is at its highest level in nine months. Forced by the wet autumn, French farmers are sowing more corn and summer barley, as indicated by the new acreage expectation from the French Ministry of Agriculture. Nevertheless, the total grain acreage in France is shrinking for the third consecutive year.
The September wheat contract on the Matif closed €1 higher at €250.75 per ton yesterday. On the CBoT, prices took a step back in the last trading session. The July wheat contract closed 1% lower at $6.65¾ per bushel. Corn showed a similar decline, losing 1.1% and ending at $4.62½ per bushel. Soybeans, as almost usual, moved mainly sideways and closed 1 cent lower at $12.13½ per bushel.
French arable farmers are forced to choose summer barley and corn. This is evident from the preliminary acreage figures from the French Ministry of Agriculture. Compared to last season, the summer barley acreage has grown by 12.2% to 502,000 hectares. The cultivated area of summer barley is still 15.8% below the five-year average. The corn acreage is 9.6% larger compared to last year, reaching 1.4 million hectares. However, this is 5% below the five-year average. Despite more summer grain being sown, the total grain acreage in France is 3.2% smaller than last season. This marks the third consecutive year of decline in grain acreage.
The acreage of sugar beets and sunflowers remains stable at 398,000 and 823,000 hectares respectively. Soybeans have fallen out of favor with French arable farmers. According to the ministry, the acreage has decreased by 5.5% to 149,000 hectares.
No export figures
The European Commission normally publishes weekly import and export figures for grains and oilseeds. Due to technical issues, the latest figures date back to March 27. Criticism of the lack of new figures is growing. Wheat on the Matif reached its highest level since July last year. Whether exports are one of the factors contributing to this rally is currently difficult for traders and analysts to assess. In addition, European grain exporters face competition from the Black Sea region. Reliable export figures are essential to assess the sustainability of the rally in the wheat market, according to critics. The absence of these figures does not contribute to market transparency.
Up to 2.5 million tons of soybeans lost
Conab, under the Brazilian Ministry of Agriculture, surprised the market earlier this week by not including the floods in the Rio Grande do Sol province in the soybean yield figures. The Brazilian bank Itaú BBA estimates that 1 to 2.5 million tons of soybeans have been lost in Rio Grande do Sol due to the floods. Itaú BBA states that around 5 million tons of soybeans still need to be harvested. The bank also warns that a portion of the stored harvest may have been damaged by the floods.
The floods have consequences not only for soybeans. May is also the month when winter wheat is sown in Brazil. Farmers cannot access the land due to the water. Delayed sowing affects the yield potential of winter wheat according to Itaú BBA.
