Grain prices had a roller coaster week which ended with a spike last Friday.
Prices rose from Tuesday through to Friday, when MATIF December wheat closed at €229.75/t, bolstered by Chinese purchases and issues with wheat in France.
On Monday it fell back to €222/t and closed on Tuesday night at €225/t.
Markets remain nervous, with weather being a real issue. Nothing has really happened since last week and yet there have been big jumps and falls in the interim.
The WASDE report this week could have an impact on supply, especially around the uncertainties of the size of Brazil’s Safrinha harvest.
The potential for price movement is not all one way. Both supply and demand have been factors in the current market and China has been very influential on the demand side in the past year.
It is now stated that China will grow more maize, but it has purchased over 26Mt of US maize. There are fears that some of these orders may be cancelled following rumours of further outbreaks of African swine fever there.
The other big market uncertainty is crop area in the US. Some believe that the overall area of maize and soya will not fall as forecasted and that means more tonnes and higher US output.
There may be some swopping of acres between maize and soya, but, whatever the reason, a 2.5m acre increase in US maize area would add 10Mt to US output and this alone would cancel most or all of the Brazilian deficit.
Native prices stronger
Large buyers remain nervous and appear to have stepped out of the market for the moment. But what will their choices be when they return?
November maize is currently priced at around €255/t, but wheat is €25-€30/t lower and barley is €40-€45/t lower. Do these prices mean that there is room for further increases or will wheat and barley take back demand from maize this year?
The stronger market sentiment spilled over into native markets in recent days. Nearby wheat is now around €250/t and barley is at either side of €230/t, depending on the hour of the day.
Imported maize is now at €285/t for nearby delivery, or €255/t for November.
New-crop prices are up about €5/t this week, with wheat now jumping between €225 and €230/t, with barley at between €210 and €215/t.
Rape prices have also seen considerable movement, with new-crop now between €500 and €510/t and well worth considering.
Also worth contemplating is a current price of €415/t for November ’22.