On Thursday, the USDA published its Prospective Plantings and Quarterly Stocks report, which is its assessment of what US farmers are going to plant for the 2018/19 season.

The report states that US farmers are cutting back on corn and soya bean acreage this year in the face of low agricultural prices. International grain markets have reacted positively to the news.

In addition to this, ongoing threats of a trade war between the US and China had not just Wall Street traders, but also grain traders on edge. The Dow Jones shed as much as 750 points on Tuesday after China announced it was slapping tariffs off a number of US products, which included key agricultural products such as ethanol, frozen pork and wine.

Fears that these trade tariffs could extend to other US agricultural commodities, chiefly soya beans, helped further boost markets.

Wheat

The USDA last week published the first full crop conditions report which showed that US winter wheat crop health status is poor. Kansas showed a good-to-excellent (G/E) rating of 10% and a poor-to-very poor (P/VP) rating of 47%.

Nine per cent of Oklahoma's wheat crops are rated G/E, with 46% rated P/VP. In Texas, 15% is rated G/E versus the 59% rated P/VP.

In the USDA Prospective Plantings and Quarterly Stocks report, the area of winter wheat was estimated to be 32.7m acres, which is about 12,000 acres higher than last year. Spring wheat acres were also projected at 12.63m acres. This is 1.62m acres higher than 2017.

Maize

In the wake of China’s 15% trade tariff on US ethanol, grain markets reacted accordingly. However, in light of the projected US maize area coming in at just above 88m acres, a 2.14m acre decline from last year, future prices rose significantly.

Soya beans

News that the Argentinian soya bean crop may be so small that they may become a net importer of the oilseed for the first time to meet their meal and oil demands was welcome for oilseeds markets. The news that US farmers are predicted to plant 89m acres this year, a 1.16m acre decline from last year, further reinforced gains made in the market.

On the Euronext exchange (MATIF) in Paris, maize and oilseed rape futures recorded marginal gains over the week. Wheat remained neutral.

Paris maize for delivery in November gained €0.75/t over the week to finish yesterday’s trade at €168.25/t.

Oilseed rape for delivery in November recorded a modest gain of € 275/t to €350.00/t.

Across the water, the Chicago grain market (CME) recorded strong gains with the exception of wheat markets.

Futures for 2018 now stand at $382.13/t and $185.70/t for November-delivered soya beans and December-delivered wheat respectively, up $5.07 and down $1.18 on last week.

Maize futures for December delivery were up $5.67 to $161.80/t.

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