International futures markets were largely flat over the past week, but there is a firmer tone to the market once again, with weather continuing to be a factor.
Wheat futures were supported by the seemingly annual concerns over the impact of cold weather on winter wheat crops, this time in the US, and the current forecast for a lower crop in Russia. Markets were also helped by news that US export sales for the coming harvest had been higher than expected in some recent weeks.
The AHDB reports that SovEcon cut its 2021 Russian wheat crop forecast by 1.5mt due to a combination of the impact of its export tax on farmers’ decisions and unfavourable weather conditions at planting. The forecasted output of 76.2mt is 9.7mt lower than the 2020 crop but it’s early days yet.
Weather is always a factor in grain markets, but it can have upside and downside effects.
Maize remains strong
While nearby Chicago maize has been largely dancing about around $5.50 per bushel, it may be set to rise again. What is more certain is that December maize in Chicago has continued to increase over the past week or so as the market tries to entice more acres into this crop and away from soya, both of which are in tight supply and looking to increase acres.
With soya beans now pushing towards £12.30/bu they are beginning to look more attractive than maize, with a price ratio of 2.5, which slightly favours soya bean production.
In the past a price ratio of 2.3 would steer US growers towards maize, but what happens on the ground will depend on what preparations have already been done to the land there for either crop.
That said, last week the USDA suggested that maize area for 2021 planting would increase by 0.5mha. This caused a temporary weakening in price, which has since picked up.
Oilseed rape markets remain exceptionally strong. Prices in Europe are strong also and MATIF traded May contracts at €461/t last Tuesday, with August rape at €417/t and November at €412/t.
Markets are somewhat stronger this week, with both old crop and new crop carrying higher prices. But there remains an almost €40/t gap in the MATIF prices for March and September/December and one or both will have to give ground between now and then.
Nearby wheat has risen to around €245/t, with barley at €215 to €216/t. November prices are also higher, with wheat now around €202 to €204/t and barley on the stronger side of €190/t. Glanbia offered its growers €203/t for November wheat and €190/t for barley earlier this week.