By: Editorial Team, StoneX Media
One third of Ukraine's winter wheat area is in moisture deficit as planting gets underway, and dry soil is also delaying Russian winter wheat planting. Russian winter wheat planting faces a second pressure, with concerns that farmers short of export revenue and paying more for diesel may sow less. Grain and oilseed futures have traded sideways as traders wait on geopolitical and data catalysts, yet the next Black Sea wheat crop is already taking shape in dry fields.
Bertrand Oesterle, StoneX VP of Clearing & Execution Sales, works with clients on futures clearing and execution across global derivatives and listed markets from London. He contributes to StoneX market intelligence on grains and oilseeds, tracking crop progress, export flows and import demand from the Black Sea to Western Europe.
"If we look at Russia, people are starting to be a little bit concerned about the state of the planting progress for winter wheat", Oesterle says. Russian winter wheat planting is running into dry soil and delays, and the size of the area sown is now in question. Beyond the weather, he points to concerns over farmers "potentially planting less because they don't have the revenue from the exports", with much more expensive diesel adding to costs on Russian farms. For wheat importers and traders, attention is shifting from Russia's current harvest to the size of the next Russian winter wheat crop.
Ukraine has harvested 25.3 million tonnes of wheat so far, and that crop needs to find a home at export or in domestic stocks. Ukrainian winter wheat planting mirrors the difficulties in Russia. According to Oesterle, "one third of the winter wheat area, which is about to be planted or in the process of being planted, is in moisture deficit". As a result, Ukraine's wheat sector is shipping one crop and establishing the next at the same time, with dry soil weighing on the second.
European winter rapeseed planting is running into the same dryness concerns as winter wheat, with progress varying sharply by country. At a conference in Germany, Ukrainian farmers told Oesterle that rapeseed is at least 85% planted, and German farmers from the region near Munich said they had already planted. That leaves France as the rapeseed market for oilseed buyers and crushers to watch. French participants, Oesterle says, described a harder picture, "where some areas don't have the moisture and it may reduce the area".
--- Written by Frédéric Guétin, StoneX Media Producer
--- Expert: Bertrand Oesterle, StoneX VP of Clearing & Execution Sales
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Dry soil is slowing winter wheat planting in Russia and Ukraine, with a third of Ukraine's area in moisture deficit. Lost export revenue and costly diesel add a second risk to the size of the next Black Sea wheat crop.
September 23 – The Nasdaq hit another fresh all-time high yesterday, with the S&P 500 close to doing so as well, though stock futures are pointing to a quietly lower start to today’s session after surging higher to start the week as optimism surrounding this week’s various diplomatic pushes abounds. That optimism continues to be reflected in the VIX, continuing to hang around roughly three-week lows, trading at 14.3 this morning. The dollar is surging higher, adding to the week’s gains, as it nears the 101 mark for the first time in nearly two months. Treasury yields are off to a higher start, with 2-year yields back up to 4.80%, 10-year yields at 4.99%, and 30-year yields just above 5.32%. Crude oil prices are looking to hold their ground after a steady decline since late last week, with nearby WTI up 1.3% to trade near $91 and nearby Brent up 1.4% to trade near $100.65 at the time of writing. The ags are mostly lower to start the day, likely influenced in part by managed money selling off some existing length amid hopes for improvement regarding commodity flow through the Black Sea as part of this week’s diplomacy blitz.
September 22 – The Nasdaq and S&P 500 both closed within 1% of their all-time highs yesterday, with stock futures pointing to a quietly higher open at the time of writing. Diplomacy continues to be the theme of the week, with markets pricing in optimism, particularly in the tech sector following encouraging results from the weekend’s meeting between U.S. Treasury Secretary Scott Bessent and Chinese Vice Premier He Lifeng. It’s also worth noting that Bessent yesterday announced the two sides would be meeting again to discuss AI safety and communication protocols in Shenzen, China in about two months, another potential sign of cooperation instead of escalation. The VIX continues to reflect optimism regarding this week’s various diplomatic pushes as it hovers near its lowest level since early September, starting the day trading just below the 14.7 mark. The dollar is sitting just above unchanged, near 100.46 at the time of writing, touching a fresh two-month high earlier this morning. Treasury yields are quietly lower to start the day, also helping bring some calm to Wall Street, with 2-year yields at 4.747%, 10-year yields at 4.949%, and 30-year yields at 5.279%. Crude oil prices continue their push lower, with nearby WTI down another 1.8% to trade near $90.30 and nearby Brent down 1.6% to trade near $98.70, both roughly two-week lows. The ags are looking at a turnaround Tuesday to kick off the session with most of the complex in the red at the break, led down by the wheat complex. Improving forecasts for planting conditions for the U.S. winter wheat crop are likely having some influence, but I’d also point out the signs of potential increasing U.S. pressure on Ukraine, which we’ll dive into in more depth below, possibly spooking out some managed money length.
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