Wheat Harvest 2019 is Officially On
As we push into the middle of July, combines are rolling in North America but also in Europe and the Black Sea. Favourable weather conditions in the Southern Plains have helped things immensely though, as 17% of the crop was harvested in the past week, to put things at 47% total. Granted this is behind the 61% harvested at this time a year ago, but there is more dry weather in the forecast through the middle of July, plus the white wheat harvest should start in the Pacific Northwest this week. The downside of the roll-out of combines is that it puts pressure on wheat prices as more supply comes into the market.
Looking elsewhere that the harvest is also rolling, IKAR reduced its estimate of the Russian total wheat crop by 700,000 MT to 79.3 MMT, blaming the hot weather as having a negative impact on spring wheat production. Worth noting however, is that the Russian Ag Ministry has suggested that in the first few weeks of harvest, average yields are about 5 bushels an acre higher than the same time a year ago. On the flipside though, FOB port prices for 12.5% protein is creeping a little higher, now sitting at about $195 USD/MT (or $5.30 USD and $6.95 CAD/bushel).
Next door in Ukraine, AgriTel is suggesting that the wheat harvest there could reach 28.8 MMT, up significantly from last year’s 23.9 MMT haul. Finally, Strategie Grains is expecting 143 MMT of non-durum wheat harvested in Europe, down 1MMT from their May estimate, again, because of the heat in June. This is a solid bump though from last year’s non-durum wheat harvest in the EU of 127 MMT. You might say that Germany and France are accounting for most of this bump, with German wheat production to jump from 19.6 MMT last year to 24.1 MMT this harvest.
One sidenote to Europe was Italy buying nearly 166,000 MT of Canadian durum in May. We’ve certainly seen a creep up in durum prices across Western Canada for spot movement. Some of this is attributed to the dryness in both North American and growing regions, but also slightly smaller carryout in the United States.
For hard red spring wheat prices, values have fallen along with the rains and there’s less concern about the crop coming off at least average yields. Certainly though, the market is waiting to see what the next few weeks of weather brings, but as these charts suggest, we usually start to see some seasonal lows at this time of year.
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