Wheat and corn market in E.U. and U.S.

US corn and US wheat were among the few commodities to end trading up yesterday. No doubt the significantly weaker US dollar played a key role here, as it makes US grain more competitive on the world markets. Inversely, EU wheat and EU corn on the Euronext in Paris came under selling pressure. 

At a good €170 per ton, the most-active wheat futures contract hit a 9½-month low, while EU corn fell for a time to below €170 per ton, its lowest level in two months. It is unusual for the prices of EU wheat and EU corn to be more or less equal, as wheat tends to be considerably more expensive than corn. That things are different this time is related to the fact that the wheat and corn supply situations differ: thanks to the record-high wheat crop in France, the silos there are amply filled. 

The silos relevant for physical delivery against the wheat futures contracts have not been accepting any more wheat for some weeks now. The corn situation is quite different: the overly dry and hot weather in Europe has resulted in the crop forecasts being repeatedly revised downwards, states Commerzbank. Yesterday the estimate of the expected average corn crop yield was lowered by a further 4.6% to 6.4 tons per hectare by MARS, the European Commission's agricultural forecasting unit. This equates to a 20.5% lower yield than last year, and points to a corresponding decrease in the EU corn crop.