EU crop report shows the need for this rain: Grain Market Daily

Tuesday, 28 April 2020

Market Commentary

  • Grain and oilseed prices declined yesterday, due to rain being forecast for Europe, good weather for planting in the US and continued worries about ethanol demand.
  • UK feed wheat futures May-20 contract ended at £155.00/t yesterday, down £1.10/t from Friday’s close. The Nov-20 contract fell £2.85/t to £164.90/t.
  • 27% of US maize crops were planted by 26 April (USDA), ahead of the five-year average (20%). Soyabean planting was 8% complete, against a five-year average of 4%.
  • Paris rapeseed Nov-20 futures also declined, down €1.25/t to €367.50/t.
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Helen Plant

Senior Analyst - cereals & oilseeds

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EU crop report shows the need for this rain

Rainfall, which has been seen today in much of the UK, and is due to spread across much of Europe in the coming days, is definitely welcome. The latest European crop monitoring (MARS) report shows how needed such rain is, especially for spring crops.

Too wet, then too dry is the story for much of western and central Europe including top producing countries such as France, Germany, Romania and Poland. Eastern parts of the UK are also affected. In these areas, winter crops are generally said to be in ‘good condition’, but more rain is needed to sustain them. More rain is definitely needed to support spring crop emergence, including barley, and early development across much of Europe.

In Ukraine, dry conditions are impacting spring planting and lowering yield expectations for winter crops.

The exceptions include Spain and Portugal. Here there was a dry start to spring, but ample rain arrived just before winter crops began flowering and crops are now in good condition. Water reserves are still low but the outlook for both winter and spring crops is good. Good prospects are also reported in Finland, Italy and Ireland.

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The report’s authors have only made small changes to their 2020 yield forecasts, which are still based on the long term averages, as it is still fairly early in the season. Winter crops will reach ear emergence / flowering in many of major producing counties, including France and Germany, over the next month. So, the May report (out 18 May) seems likely to include more insight on yields.

Also, the report highlights that they found no evidence of a negative impact on spring planting or the availability of inputs due to the coronavirus pandemic. However, the availability of labour ‘remains a key concern’.

So the message is keep monitoring for now. Bear in mind that for prices to be supported, the loss in production potential will have to be greater than the loss in demand from the coronavirus pandemic.

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