The rally in grains continues. After a very strong week, corn and wheat are sharply higher on Monday again, gaining 3-4%. The market is supported by weather issues all over the globe.
Brazil remains very dry threatening the second corn crop. Only the northern part of Mato Grosso is predicted to have normal rains during the next two weeks.
Spring wheat regions in the US and Canada are also predicted to remain drier than normal.
The EU wheat regions have lacked rains recently as well, however, the outlook for the region improves.
The Black Sea is a mixed bag. The wheat crop outlook for Ukraine’s and Russia’s South (#1 wheat region) remains good. However, Russia Central Black Earth region (#2 wheat grower) reports historically high winterkill of 15-20%. Part of it could be replanted by wheat, part by other crops like sunflower, corn, or barley. We estimate Ukraine’s wheat crop at 27.8 MMT (24.9 MMT in 2020) and Russia’s crop at 80.7 MMT (85.9 MMT, 85.3 MMT ex Crimea). Russia’s nearest 12.5% wheat FOB rose $6 to $253 last week, as per SovEcon’s assessment.
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