With the December 2022 contract now gone from the MATIF trading screen, the focus on futures must lean towards May or indeed November 2023.
However, these messages are similar to the December story, as all price positions have weakened considerably in recent weeks.
Having fallen back from a high of €329.25/t in the second half of September (was at €388.50/t on 20 May), the December 2023 wheat price was down to €277.75/t at last Friday’s close, but picked up slightly this week and closed on Tuesday at €281/t.
Global grain markets continue to be pressured by the increasing availability of competitive Black Sea grain and large production forecasts for Australia. Recessionary fears continue on the demand side.
The USDA released its most recent World Agricultural Supply and Demand Estimates (WASDE) last week with no major surprises to excite markets.
Global wheat supplies for the 2022/23 season were lowered by 2.1Mt (now 780.6Mt) from the previous month’s estimate, arising from production cuts in Argentina and Canada.
Production cuts on wheat outweighed consumption losses, leaving global ending stocks down 0.5Mt.
Global maize production was also revised down by 6.5Mt in the WASDE, but this was expected due to drops in production for Ukraine, Russia, and the EU.
Much of this was from Ukraine, where harvest was slow and an amount of the crop remains to be harvested.
Despite the occasional war-related stoppage, grain continues to be exported from Ukraine. This is competitively priced and pressuring prices elsewhere.
Elsewhere, expectations continue for a record Australian wheat crop, now forecast at 36.6Mt. Meanwhile, maize planting in Argentina is well behind schedule and this could affect production.
The past few weeks have made it difficult in terms of selling and moving grain and this seems to be intensifying as we move closer to Christmas.
In the main, the bigger buyers have cover taken well out into the new year and this makes prices difficult to pin down.
It would seem that the nearby market is confined to relatively small volumes. Nominal prices suggest around €315/t for wheat and €300 to €305/t for barley, but I have heard of barley being done at up to €310/t.
Prices for November suggest either side of €290/t for dry wheat and between €275 and €280/t for barley. These prices are day-dependent due to ongoing volatility.