Analysis Grains

Wheat price easily drops again on the future market

June 11, 2024 - Jurphaas Lugtenburg

Russia caused a rally in the wheat market at the end of May. Concerns about frost and drought have subsided again, and now Russia is being named by analysts as a significant cause for the decline in the futures markets. Additionally, there is some harvest pressure from the US where the wheat harvest is already picking up early. Corn and soybeans are on the rise despite a good starting position for these crops in the US.

The September contract for wheat on the Matif closed €4.75 lower at €239 per ton yesterday. Wheat also took a hit on the CBoT and closed 3.2% lower at $6.07½ per bushel. Corn and soybeans, on the other hand, saw some gains on the Chicago exchange during the last trading session. Corn closed 0.7% higher at $4.51¾ per bushel. Soybeans showed a similar movement, up 0.8% to $11.88¼ per bushel.

Russia put pressure on the wheat market. The price for Russian Black Sea wheat from Ikar dropped $6 to $242 per ton. According to SovEcon's data, Russia exported 1.36 million tons of grain last week, which is 80,000 tons more than the previous week. Wheat, with 1.2 million tons, is by far the most important product in Russian grain exports. Rain is forecasted later this week in the Black Sea region. Analysts suggest that a third to half of the wheat in the Black Sea region could benefit from the precipitation.

APK-Inform estimates the Ukrainian grain harvest for the upcoming season at 52.76 million tons. This is 12% less than the 2023 harvest and in line with the forecast of the Ukrainian Ministry of Agriculture, which expects a harvest of 52.4 million tons. According to APK-Inform, Ukraine is expected to harvest 19.99 million tons of wheat, 26.77 million tons of corn, and 4.51 million tons of barley. Grain exports for the 2024/25 season (running from July 1 to June 30) are estimated at 36.16 million tons. Ukraine is expected to export 49.02 million tons in the current season.

Wheat Harvest Gains Momentum
In the US, the harvest is putting some pressure on the wheat market. According to this week's Crop Progress report, 12% of the wheat acreage has been harvested. Oklahoma leads with 48% of winter wheat harvested, closely followed by Texas with 47% harvested. In the largest wheat state, Kansas, 5% has been harvested. Dry weather is forecasted for the next ten days, allowing progress in harvesting even in the more northern Kansas. The condition of winter wheat in the US has slightly deteriorated this week, with 47% of the acreage rated good or excellent, down from 49% last week. Planting of spring wheat is nearly complete with 98% planted. The condition of spring wheat has also slightly declined, with 72% of the acreage rated good or excellent, compared to 74% last week. Last year, only 60% of the spring wheat acreage received a good or excellent rating.

Three-Quarters of Corn in Good Condition
Corn planting, like spring wheat, is in the final stages. 95% of the planned acreage has been planted, matching the five-year average, but lower than the 98% planted by this week last year. Growth is slightly ahead of the five-year average, with 85% of the acreage standing tall compared to 84% in the five-year average. Last year, 91% was standing tall by this week. The condition of corn has dropped by 1 percentage point, with 74% of the acreage now rated good or excellent.

87% of the planned soybean acreage has been planted, higher than the five-year average of 84% and last season's 95%. 70% of the soybeans are now emerging. This week, for the first time this season, the USDA included the condition of soybeans in the Crop Progress report, with 72% rated good or excellent.

Jurphaas Lugtenburg

Jurphaas Lugtenburg is a market specialist in onions, carrots, and commodities such as wheat, corn, and soybeans at DCA Market Intelligence. He combines his degree in business administration with a passion for farming.
akkerbouw graanoogst tarweoogst rusland tarwe - agri

Analysis Grains

Drought in Black Sea region affects yield potential

tarweoogst tarwe - agri tarwe

Analysis Grains

Wheat price hits bottom and bounces back

combine gerst brouwgerst gerstoogst zomergerst

Analysis Grains

Grain harvest in Western Europe slowly begins

bewaring akkerbouw opslag graansilo

Analysis Grains

Exporters are quickly emptying the wheat silos