While wheat looks set to be in oversupply globally, our markets may currently provide a selling opportunity for the months of the New Year.
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The past week has seen flat to slightly negative price movement in international futures markets, especially on wheat. The French MATIF December wheat futures price closed on Tuesday at €179.50 compared to €181.50 at the end of last week.
The downward movement was largely precipitated by lower than expected US wheat export sales but a lowering of global wheat production numbers by the International Grains Council (IGC) to 762m tonnes is providing a level of counterbalance in price sentiment. This report still shows an increase in global wheat stocks (271m tonnes) relative to last season, while maize carryover stocks have been lowered to 278m tonnes. But total grain stocks of 592m tonnes would be the lowest since 2105.
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The main issues now are in the southern hemisphere where dryness concerns continue to result in a lowering of production forecasts. The IGC report decreased Australian wheat production estimates by 2.1m tonnes. It also showed a reduction in Argentina’s grain production estimates of 0.9m tonnes for wheat and 3m tonnes for maize.
Native prices are stronger this week with spot wheat at €182 to €183/t and barley at €172/t. Prices for May are even stronger, with wheat now at €190/t and barley at €177/t. These price levels might be considered as a selling opportunity as some believe that prices will come under pressure in the new year.
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The past week has seen flat to slightly negative price movement in international futures markets, especially on wheat. The French MATIF December wheat futures price closed on Tuesday at €179.50 compared to €181.50 at the end of last week.
The downward movement was largely precipitated by lower than expected US wheat export sales but a lowering of global wheat production numbers by the International Grains Council (IGC) to 762m tonnes is providing a level of counterbalance in price sentiment. This report still shows an increase in global wheat stocks (271m tonnes) relative to last season, while maize carryover stocks have been lowered to 278m tonnes. But total grain stocks of 592m tonnes would be the lowest since 2105.
The main issues now are in the southern hemisphere where dryness concerns continue to result in a lowering of production forecasts. The IGC report decreased Australian wheat production estimates by 2.1m tonnes. It also showed a reduction in Argentina’s grain production estimates of 0.9m tonnes for wheat and 3m tonnes for maize.
Native prices are stronger this week with spot wheat at €182 to €183/t and barley at €172/t. Prices for May are even stronger, with wheat now at €190/t and barley at €177/t. These price levels might be considered as a selling opportunity as some believe that prices will come under pressure in the new year.
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