Market Morsel: How are some of the worlds biggest crops looking?
Market Morsel
We are approaching the exciting time of the year for grain, and you need to keep a close eye on markets (and the EP3 website, of course).
The world’s crop is being grown, and this is when the direction of next year’s pricing will largely be set. So, we will be updating you here on a regular basis on how the rest of the world is shaping up.
Keeping an eye on the condition of the crops around the world is important because if the rest of the world has poorer production, the prices can be driven higher due to lack of supply.
The condition of the crop is measured in a few major areas, and we tend to focus on how much of the crop is good or excellent. In this piece, we will look at the French and US wheat crops.
Summary & key takeouts
Monitoring French wheat conditions is crucial for setting the direction of European wheat prices because France is the largest wheat producer and exporter in the European Union. As a result, any significant changes in French crop conditions can heavily influence overall EU supply expectations. European wheat prices are benchmarked largely off French production and export potential. Poor conditions can trigger upward price pressure due to reduced availability, while favourable conditions may lead to price declines as exportable surplus grows.
At the moment, wheat conditions in France are 71% good/excellent, which is down from 74% a month ago. The average for this time of year is 77.6% good/excellent, so slightly below average.
United States
The US winter wheat condition can impact futures prices in Chicago, and the price of US futures tends to have a huge impact on the prices we receive in Australia. At the moment, we are just looking at winter wheat conditions, but in later updates, we will include spring wheat.
Winter wheat conditions on a national basis are currently 52% good/excellent, down 2% from last week. The average for this time of year is 46.8% good/excellent, placing this year above average. This year, the condition report has ranged from 45% to 54% good/excellent.
