Grain markets found little in the way of encouraging news to help prices in the past week. The heavy global grain supply continues to pressure price sentiment on international markets, as yet another new record crop looms.

If supply pressure was not enough, the news that Russia will impose a 0% tax on wheat exports for the next two years added to the pressure. It is estimated that Russia had a record 72 million tonne wheat harvest, leaving more to export than in previous years. The zero tax level is to help exporters and buyers to move an even bigger quantity on to an already oversupplied market.

One of the few bright spots in the market (including decreased production in some EU countries) has been the shortfall in production in India following two drought years. Imports are inevitable.

US Chicago wheat futures for December fell to a new low last week when it dropped below $3.90/bushel. It has picked up slightly since, but seems to have difficulty staying above $4/bu.

December maize also dropped below $3.15/bu, but it too has improved slightly since then.

However, there is a weaker tone to the native market as a consequence. Spot wheat has slipped back a euro or two to around €156 to €157/t. Spot barley moved a similar amount and is now at around €146 to €147/t.

November positions are also back, with wheat now around €158 to €160/t, but barley seems less affected at around €150 to €152/t.