Friday, 26 July 2019
European wheat markets have seen little movement this week. UK feed wheat futures (Dec-19) have traded within a £0.75 range from £146.25/t to £147.00/t since Monday. Paris milling wheat markets have traded between €179.25/t and €180.75/t at close yesterday.
US grain markets have also been following a similar sideways trend. Chicago maize (Dec-19) traded within a $1.87 band and Chicago wheat (Dec-19) traded within $3.30 from Monday to yesterdays close.
With cereal harvest underway in the northern hemisphere, yield and quality reports will be monitored closely to readjust any forecast currently in place.
Global Weather Impacts
- Europe is experiencing its second heatwave this season
- US weather has gone from extreme wet to high heats
- The Black Sea region is facing some rain during harvest
- Australia remains dry
Weather will continue to be a driver of global markets. Most key producing countries have been experiencing difficult weather patterns this season.
Everyone is aware that Europe is currently experiencing a second bought of record temperatures. For oilseed rape and cereals, where harvest is underway, the hot weather came late enough that it didn’t negatively affected crops. Maize remains the concern for Europe. Although the MARS report shows little damage to European maize, concerns around crop development and the potential for farmers to switch maize harvest from grain to silage remain. France AgriMer downgraded maize conditions from 70% to 63% “good”.
Generally, US weather patterns have been unfavourable this season. May-June brought excessive rainfall causing issues for maize and soyabean planting and raising concerns for cereal crop development. Then July brought higher than normal temperatures, again hindering crop development. Maize and soyabean development is in question, although temperatures have dropped again for now. However, the US cereal harvest has benefitedfrom the warm weather, progressing well with positive quality reports.
Ukraine & Russia
Fears around potential crop yields were apparent as Ukraine and Russia experienced hot climates during key crop development stages. With harvest underway, its apparent yields for both oilseed rape and wheat are down but no major concerns yet. Recently temperatures have dropped, but this has brought some rain and storms causing some upset for cereal harvest.
With seeding complete, the focus for Australia is now on crop development. Temperatures have been relatively cool but also dry. The most recent weather outlook by the Bureau of Meteorology states Australia is expecting a drier than average August for Eastern cropping regions. However, Western cropping regions could be facing a wetter than average August. Generally, cropping regions have adequate soil moisture so at present development concerns are minimal.
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