As Focus Shifts to Harvest, Geopolitics Momentarily Rest in The Shadow
Bertrand Oesterle, StoneX VP of Clearing and Execution Sales, shares detailed insights on global grain markets as harvests and politics reshape the landscape.
Key Takeaways
EU wheat output rebounds but remains under price pressure
Russia and Ukraine harvests are slower with mixed regional yields
Demand signals from China and India point to ample supply
Wheat Harvests Strong Across Europe
France is nearing the end of its wheat harvest, with output up 25% year-on-year and quality meeting export standards. German output is up 16.5%, and EU-wide yields are 6% above the five-year average. However, prices remain below production costs, and France’s end-season stocks are estimated at a 21-year high of 3.87 million tonnes. Market dynamics show early signs of fund rolling, with a slow shift from September to December contracts. As of last week, funds remained net short by 273,000 lots.
Russia and Ukraine Send Mixed Signals
Russia’s export pace has slowed amid harvest uncertainty and uneven regional yields. Southern regions like Rostov have underperformed, while others like Stavropol and Krasnodar are offsetting losses. Private estimates range from 83.2 to 84 million tonnes, below government projections of 88-90 million. Ukraine’s harvest is progressing more slowly, though milling quality appears high. Ukrainian exports are off to a slow start, with just 250,000 tonnes shipped compared to over 1 million at the same point last year.
Demand from Key Buyers Weakens
China imported just 350,000 tonnes of wheat in June, down 71% from the prior year. This suggests the June heatwave had limited impact on domestic supply. India’s July 1 wheat stocks surged to 35.9 million tonnes, far above its 27.6 million target. Iraq reports reserves sufficient to meet 16 months of consumption, further tempering demand expectations. Recent tenders Tunisia and Taiwan have maintained some activity, but volumes remain modest.
Oilseeds, Corn and Trade Politics Evolve
US corn conditions are rated 74% good to excellent, a 9-year high, while Brazilian output estimates have been revised upward to over 136 million tonnes. EU maize yields are under pressure from recent heat, though rainfall has helped stabilize some areas. In oilseeds, Ukraine imposed a 10% export tax on rapeseed and soybean, causing supply concerns in Germany. Meanwhile, China remains closed to Canadian canola but is testing five cargoes from Australia. EU harvests show high oil content and improving yields. Geopolitical developments include resumed peace talks between Russia and Ukraine and several new US trade deals, though tensions with the EU persist. Trump’s push for import tariffs continues, while Canada is exploring deeper ties with Mercosur to diversify trade relationships.
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---- Written by Frederic Guetin, StoneX TV Producer
---- Expert: Bertrand Oesterle, StoneX VP of Clearing and Execution Sales
Grains & Oilseeds
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