- We will start tonight’s update with a “bold statement”, and that is that global weather conditions are pretty good, if not absolutely ideal, for crop development. It would not take much to make these conditions even better, and timely rains in some areas could be all it needs. That said, we believe today’s price hikes on the back of weather concerns are somewhat misplaced and we favour selling such rallies.
- Harvest progress has been reported in many areas, Spain’s barley crop is well under way, complete in the south, and commencing in the north with good yields so far and quality believed to be better than in recent years. Soft wheat progress is good in central regions and yet to start further north, the yield so far is reported to be excellent. Stratégie Grains forecast soft wheat output at 6.8 million mt to be the highest in 13 years and barley at 9.1 million mt well above last year’s 6 million mt.
- The French harvest is now under way, at about 10 days later than usual due to the weather, and whilst it is still early, yield is reported to be lower than last year. The likelihood of this trend following the harvest north would seem to be high. Quality has yet to be determined although initial indications show a high degree of variability.
- US winter wheat is 67% complete, with the crop fully harvested as far north as Kansas. If the weather plays its part the corn harvest will get under way in a couple;e of weeks in the south, soybean harvesting is likely to start towards the second half of August. Russia’s AgMin report the harvest to be complete in Krasnodar with output at 7.1 million mt, which is more than double last year’s 3.4 million mt. Krasnodar, and the south, are key in determining both the pace of exports as well as price. Ukraine’s harvest is reported to be nearly 70% complete with yield almost a third higher than last year.
- The US crop condition report showed the proportion of corn rated good/excellent at 66%, a drop from last week’s 68%, and soybeans were rated 65% good/excellent, a decline from 67% a week ago. The condition downgrades have no doubt contributed to today’s price direction as volume in Chicago has been brisk with fund short covering in evidence.