Grain markets show a stronger tone this week but many feel that this will be a short term phenomenon. Short term buying to secure cover is seen as the major reason and once this is bought up, the feeling is that prices will slip down again, as they have done previously in recent weeks. But real physical markets here show little change, as harvest pressure forces additional uncertainty in the spot market.

Most futures markets finished stronger on wheat last week but these have fallen since then. The most dramatic market movement has been the virtual coming together of wheat and barley price offers for November. This has happened because of the abundant supply of feed wheat, which has been helped by milling rejections across parts of continental Europe; forecast abundant maize supplies; and relatively tight barley supply in the global market.

Against this background wheat price has been steadily falling in an effort to buy demand. The result is a virtual equilibrium in prices between imported wheat, barley and maize for November at this point. However, some believe that maize price may fall further if the global crop delivers up to expectation.

Ultimately an oversupplied market is about buying demand at discounted prices for as long as sellers are prepared to sell. Increased grain storage capacity in the US has generated an unwillingness to sell at below cost prices but other suppliers may take a different view.

Spot prices are highly variable as some sellers unload barley and wheat at discounted prices to clear storage capacity. Offers for spot dry wheat are currently in the €159-€162/t range, with up to €165/t in places from end users. Barley prices tend to be in the €150-€157/t range with the lower prices for immediate delivery.

November prices are tending either side of €160/t for both wheat and barley. But these will depend on where maize prices go and the seller’s location relative to the end user.