Futures markets show some improvement but the supply fundamentals for the current crop point to the need for caution.
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Markets continue to firm in the lead up to the new year, with Chicago wheat moving back into July peak territory and a substantial rise evident for maize also. MATIF has also risen, with December 2020 futures closing on Tuesday at €186.50/t, up from €184 at close of business last Friday.
Reduced southern hemisphere wheat supplies remain a significant factor. Lower yields in south America, plus the increasing consequences of the ongoing drought in Australia, point to an increased focus on weather consequences for the 2020 market. But technical and political market drivers are also issues, especially in the US.
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Native prices seem somewhat higher but a general slowness in demand means they have not moved to the same extent as futures. Lack of demand leaves the trade in a difficult marketing position and this is generally reflected in prices.
Spot wheat to the trade is around €190-€195/t but spot is now next year and even further out. Indeed, the top end of this is arguably the May price for wheat. But prices direct to end users in recent weeks have been either side of €200/t.
Barley is a much less certain market in trade terms due to lack of demand. Prices to the trade remain around €175/t well into next year but again prices to end users could be closer to €180/t.
New crop prices to the trade remain around €185 to €187/t for wheat and somewhere around €175/t for barley.
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Markets continue to firm in the lead up to the new year, with Chicago wheat moving back into July peak territory and a substantial rise evident for maize also. MATIF has also risen, with December 2020 futures closing on Tuesday at €186.50/t, up from €184 at close of business last Friday.
Reduced southern hemisphere wheat supplies remain a significant factor. Lower yields in south America, plus the increasing consequences of the ongoing drought in Australia, point to an increased focus on weather consequences for the 2020 market. But technical and political market drivers are also issues, especially in the US.
Native prices seem somewhat higher but a general slowness in demand means they have not moved to the same extent as futures. Lack of demand leaves the trade in a difficult marketing position and this is generally reflected in prices.
Spot wheat to the trade is around €190-€195/t but spot is now next year and even further out. Indeed, the top end of this is arguably the May price for wheat. But prices direct to end users in recent weeks have been either side of €200/t.
Barley is a much less certain market in trade terms due to lack of demand. Prices to the trade remain around €175/t well into next year but again prices to end users could be closer to €180/t.
New crop prices to the trade remain around €185 to €187/t for wheat and somewhere around €175/t for barley.
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