Grain prices continue to bounce about, but, on balance, the trend is down slightly over the past few weeks.

That said, MATIF December wheat closed last Tuesday night at €254.50/t, down from the previous Friday close of €257.50/t, but up from a week earlier when it closed at €252.50/t.

In the interim, it had risen to over €262/t, driven primarily by the fear of a possible Russian invasion of Ukraine at the time. But that seems to have eased for now and so have grain prices.

Black Sea wheat to Egypt

The significance of the region for grain exports was emphasised by the fact that Egypt again purchased wheat from a number of countries in the Black Sea region last week.

Meanwhile, some market analysts indicate that global wheat production is likely to increase slightly this year and that this may act to weaken price sentiment on wheat for the coming season.

But there is a lot of weather and growing to happen yet before that becomes a reality.

Maize influence

Meanwhile, nearby and new-crop maize prices continue to find support from weather conditions in South America.

There has been some rain for maize in Argentina, but not enough. February is regarded as a critical month to complete grain fill for final yield.

This uncertain production outlook is acting to support maize prices, which have continued upwards in Chicago since mid-January and they continue to do so.

This is also being reflected in imported prices for new crop at the end of the year and this provides indirect support to wheat and barley prices here.

In Brazil, the earliest crops are now being harvested, while the bulk of crops are only starting into grain fill.

Of greater importance here is that the Safrinha maize crop is now starting to be planted.

This maize crop is critical to Brazil’s export potential, as it is expected to account for about 76% of its production. Weather continues to be critical to output potential.

Native prices

The recent trends in futures prices are being reflected in physical prices here this week.

Nearby wheat is back in the €302 to €305/t range, with barley at €300/t, plus or minus, depending on the day.

Ultimately, the weaker sentiment hinges on a lack of physical demand currently, which was predictable because of the levels of forward cover taken prior to Christmas.

Forward prices are up slightly though, due to futures price movements.

Wheat is around €250/t and barley around €240/t for November positions.