On Friday last, the USDA’s quarterly stock report showed an unexpected increase in area for soya bean planting. It was expected that between 86 and 88 million acres would be planted, when in fact the report outlined that 89.5 million acres of American farmland is to go under soya bean.

As a result, soya bean futures fell by around €5/t. Indeed, big crops of soya bean coming from the USA and South America could spell cheaper prices for farmers later in the year, provided there is a good growing season and no major weather events. There has been a lot of fund money selling soya bean short in recent days, with potential profits to be made here.

Though the USDA report showed area under maize to have contracted by 4% from 2016 and likewise wheat back 8% – making 2017 the USA’s lowest wheat-area year since records began in 1919 – huge cereal stocks are acting as a cushion for US grain markets against the impact of reduced plantings. This was an expected outcome of the report. On March 1 of this year, wheat stocks were at a 29-year high – 17% up on 2016, with maize stocks up 10%. Global oilseed futures remain under pressure with news of the projected spike in soya bean supply.

Spot wheat has recovered slightly to €178/t, after slipping back to €176/t last week. As with last week, it is following the futures, with May and November forward prices increasing from €179/t to €182/t and €169/t to €172/t respectively. Spot barley remains relatively unchanged at €163/t.