Wednesday grain market update: WASDE report weighs on markets

Every month, the USDA releases a new World Agriculture Supply and Demand (WASDE) report, which has a big influence on sentiment in grain markets in the US and Europe. The anticipation from the market in the lead-up to the release of this latest WASDE report was that the USDA would upwardly revise its estimates for this year’s harvest once again and so it proved to be the case.

The losses for cereal futures extended into Tuesday on the Chicago exchange as US officials raised production forecasts for 2015/'16 in some major growing areas of the world. In Europe, prices were under added pressure as Russian and Ukraine wheat exporters fended off EU competition to win the latest tender for wheat from the Egyptian grain import authority GASC.

Europe

On the Euronext exchange in Paris, cereal futures declined across the board while oilseeds were more positive.

Futures prices for wheat for May 2016 delivery were back almost €3/t to finish Tuesday’s trade at €188/t, while May 2017 wheat was back €2/t to settle at €194/t.

Maize futures in Paris were steadier than in Chicago, albeit still falling. Prices for maize for June 2016 delivery were down slightly to €175/t, while June 2017 maize futures lost €1/t to end the day at €179/t.

Rapeseed fared better than cereals during Tuesday’s trade. May 2016 rapeseed futures gained slightly to €376/t, while prices for May 2017 rapeseed rose by €1/t to end the session at €364/t.

Chicago

On the Chicago exchange (CBOT), the losses incurred for cereal futures on Monday continued into yesterday’s trading session in light of the USDA report.

December 2015 SRW wheat futures retreated by $4/t to finish at $180 (€168/t), while SRW wheat for December 2016 delivery lost more than $3/t in trading to settle at $192/t (€179/t).

On the back of the increased forecast for this year’s harvest, US maize futures hit their lowest point in months. December 2015 maize futures lost $3/t in trading to finish at $141/t (€132/t), while December 2016 maize was back $2/t to end Tuesday’s trade at $154/t (€143/t).