Grain price: Indications of harvest price will be a while off
The winter barley harvest has started in the south of the country and more combines are set to roll into next week. The harvest price for that grain is likely to remain a mystery for many weeks to come by the look of things and this might be for the better.
At present, the story of the harvest in Europe is only beginning to tell and in the US the corn acreage remains up in the air.
The Wall Street Journal this week reported that despite being offered significant premiums on their corn, farmers in areas affected by the continued rain in the past few months during planting have declined to sell.
The reason for holding out is because farmers expect a higher price to be paid later in the season as the effect of a late sowing date and poor weather at planting on yield becomes clear.
Meanwhile, July’s World Agricultural Supply and Demand Estimates (WASDE) report was released Thursday, July 11.
The report forecasts 2019/2020 wheat production in the US to increase by 18 million bushels. Hot and dry conditions in the EU, Russia and Ukraine in June also resulted in a forecast reduction in wheat production.
The MATIF wheat prices increased by almost €3/t the day after the report was published, while LIFFE wheat increased by approximately £2/t.
At present, corn production is forecast to rise in the US, while production in Ukraine is also expected to increase due to an increase in area planted. 2018/2019 corn production in Argentina looks to have increased based on harvest results to date.
Barley production is expected to be up in Canada, but lowered in Ukraine and India.
Last week, FrenchAgriMer estimated a decline in crop condition. The percentage of spring barley crops in good to excellent condition declined from 86% to 76% in a week. However, this did not appear to affect malting barley price. The Free-On-Board (FOB) Creil hit €170.00/t this week.
As of July 5, 22% of winter barley had been harvested in France and 73% of crops were reported to be in good to excellent condition. 75% of wheat crops were reported to be in good to excellent condition in the same report.
The wheat harvest has started before oilseed rape in some parts of central France, which were hit by drought. Yields in the region are expected to be down.
However, reports of low protein contents in French cereal crops on the west coast of the country may be a sign of high yields.