Northern hemisphere corn and wheat markets see better weather prospects

30-Apr-2021 - Last updated on 30-Apr-2021 at 14:56 GMT

Related tags Black Sea Canola Soy Wheat

Both corn and wheat markets were pulling back as rain and more favorable forecasts emerged for wheat in the US, Canada, and across the EU.

However, corn remains a concern in Brazil, where very little precipitation has landed or is forecast across large parts of the Safrinha corn area, report UK based commodity market specialists, CRM Agri.

Wheat watch

Statistics Canada released their March planting estimates. “Overall, there is a trend towards oilseeds and away from grains. The total wheat area is estimated to be down 6.9% year on year,” noted the analysts.

Meanwhile, Black Sea confidence remains strong, with estimates for Ukraine wheat production in 2021/22 at 27.7MT up from 25.3MT in 2020/21, according to the Ukrainian Grain Association.

Fragility in corn markets

The analysts said storms and precipitation in the US will be welcome, increasing soil moisture and the prospects for US corn; Chicago corn markets have taken a breather this week. “However, potential delays to planting could re-ignite tight end season stock concerns,” they noted.

Global corn markets remain extremely fragile, they commented.

In Argentina, the Buenos Aires Grain Exchange has estimated that the corn harvest has reached 17% harvested, well behind the 34.5% last year and 28% average. Average yields are improving as the harvest progresses, but remain highly variable, reported CRM Agri.

Brazil has remained dry this week with declining crop conditions in key Safrinha [second corn crop] regions, said the analysts.

“The main focus remains Brazil, where the Safrinha corn crop is developing. Following the late planting, a larger proportion of the crop than normal will be developing during the dry summer months, placing a greater importance upon early development. However, March and April have been abnormally dry across large parts of Mato Grosso, Mato Grosso do sul and Minos Gerais, reducing the potential of the second corn crop. Early estimates were for an 80MT crop; in our opinion, this is now too ambitious, and a crop closer to 75MT is more likely.”

Soy story

US soybean markets continue to be well supported, and with the tight US end season stock situation well known, they will remain well supported until the US planting campaign is complete and confidence arrives for next season, said the UK market watchers.

“In the US, the planting campaign is only just getting underway and into the second week of planting. Like with corn, the weather in the US isn’t perfect for crop establishment and development with additional rainfall required. Near 10% of the US soybean area is in North and South Dakota, and like with wheat, there is only limited rainfall due to arrive in the next week.”

In the southern hemisphere, Argentina has harvested near 10% of the soybean crop, far behind average progress, and while yields have been variable, they remain better than the dry La Nina potential, remarked the analysts. “Following record production in Brazil and early signs for better than feared production in Argentina, global oilseed markets are struggling to push higher.”

Beyond soy, a CRM Agri report finds that, overall, Canadian canola planting is estimated to increase by 3.6% this year, undoing the previous year’s reduction in area.