Analysis Grains
Wheat in Northern Europe enters winter well
The tensions between Russia and Ukraine are not decreasing, yet the war premium in the wheat price is being reduced. Winter wheat for the 2025 harvest did not have an ideal start in the countries around the Black Sea due to drought in the region. In Southern Europe, farmers are facing too much water. In Northern Europe and the US, winter grains are relatively doing well. In Brazil, soybean growers are making good progress with planting.
The December wheat contract closed €4.75 lower at €214.25 per ton yesterday. Wheat also took a step back on the CBoT, closing 1.6% lower at $5.35¾ per bushel. Corn's loss was limited to 0.2%, closing at $4.24¾ per bushel. Soybeans showed a cautious increase in the last trading session, closing 0.2% higher at $9.85¾ per bushel.
The situation remains unsettled in the Black Sea region, but the war premium in the wheat market is being reduced. According to analysts, the main reason behind this is that despite the warfare, the grain exports of both Russia and Ukraine are not really suffering. The amount of wheat available for export in Russia is a point of interest. SovEcon lowered the wheat export expectation for this season by 1.8 million tons to 44.1 million tons. The total Russian wheat harvest is estimated by the market bureau at 52 million tons, down from 53.6 million tons in the previous forecast.
Drought in the East
The weather also exerted some price pressure on the wheat market in the last trading session. Rainfall in the east of Ukraine and the southwest of Russia provided some relief for the winter grains suffering from drought in the area. The JRC's Mars bulletin (the scientific bureau of the European Commission) painted a less optimistic picture of the winter grains around the Black Sea. Due to drought in Romania, Bulgaria, Turkey, Ukraine, and the southwest of Russia, the winter grains and rapeseed had difficulty getting started, according to the JRC. October and the first half of November in Turkey were the driest period since the JRC began measurements in 1991. In the eastern European part of Russia towards the Urals, the temperatures were colder than average, which also did not bode well for the crops there.
In parts of Spain and the North of Italy, farmers are dealing with excess water. The damage from floods to agriculture has remained limited according to the JRC. Planting of winter grains has been delayed due to the wet conditions. Although it is getting late, the temperature is sufficient for planting.
In the Northern and Central parts of Europe, Scandinavia, and the Baltic States, the past one and a half months have been relatively dry. In these areas, 50% to 100% of the average amount of rain has fallen, as reported by the JRC. This has given farmers the opportunity to plant the planned area of winter wheat. Overall, the wheat is looking good, notes the JRC.
Wheat planting in the US almost complete
The USDA released the latest edition of the Crop Progress report for this season yesterday. In the US, almost all winter wheat is in the ground. 97% of the planned area has been planted, which is the same as this week last year. The five-year average is slightly higher at 98%. The condition of the winter wheat has significantly improved this week due to rain. 55% of the area is rated good or excellent, up from 49% last week. These figures, of course, pertain to the upcoming harvest but also influence the sentiment in the day market.
Soybeans are supported by orders from China. Some sources report that China quickly bought 8 to 10 shiploads of soybeans from the US just before Trump left the White House last Friday. In Brazil, soybean growers have planted 86% of the planned area, as reported by AgRural. Last week, 80% had been planted, and this week last year, 74% of the planned area had been planted.
