Wheat

Drought concerns still grip the US, with approximately 45% of its winter wheat production area still considered to be in drought, according to the US Drought Monitor. Winter wheat is heading for a critical stage in its life cycle as it will soon break dormancy and will require rainfall in order to avoid significant yield loss. These concerns helped rally Chicago wheat future prices throughout the week.

Back in Europe, early projections by FranceAgriMer has ranked 84% of the French wheat crop as good or excellent. This compares to 92% last season.

EU wheat export forecasts have once again been cut, with 21.4m tonnes now expected to be exported from the EU in 2017/18. According to Strategie Grains this is a decline of 300,000t from the previous projection in January.

Oilseed rape

Paris oilseed rape futures failed to follow the rallies seen in Chicago for soya beans last week, most likely as a result of record oilseed rape stocks in Canada, as reported on two weeks ago.

Maize

Concerns remain over how continued dry weather in Argentina could affect the country's maize crop. A large proportion of the crop has entered the critical, yield-influencing silking stage.

Soya beans

Soya bean prices recorded a significant raise again last week due to ongoing concerns about the impact of dry weather in Argentina.

Despite recent rainfall, the centre and south of the soya bean growing regions of Argentina are still under pressure for moisture, according to the Buenos Aires Grain Exchange (BAGE). As a result, 56% of Argentina's crop is rated to be in a poor or very poor condition, putting yield potential at risk.

As Argentina is the world’s third largest soya bean exporter and largest soya meal exporter, any concerns for the yield potential of its crop can have a big impact on markets.

The progress of the Brazilian soya bean harvest continues to fall behind last year following persistent rainfall. If the harvest pace continues to lag, any delays in bringing the 2017/18 Brazilian crop to market could potentially support soya bean prices.

Europe

On the Euronext exchange (MATIF) in Paris, maize futures remained static while grain and oilseed future prices both recorded losses over the last week.

Milling wheat for delivery in December recorded a loss of €1/t since last week to finish yesterday’s trade at €171/t.

Similarly, oilseed rape also recorded a moderate loss, with Paris prices down €2.50/t since last week to €352/t by close of business on Monday.

Chicago

Looking across the water at the Chicago grain market (CME), maize, wheat and soya bean have all made gains over the week.

December 2018 futures now stand at $156.50/t and $206.80/t for maize and wheat respectively, up $0.60 and $14.20 on last week.

Soya bean futures have also made significant gains over the week, with contracts for November delivery up $31.10 to $403.10/t.

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Weather issues affecting futures markets

Grain markets: dry weather domination sees market gains