The second half of last week certainly rocked the MATIF futures market for a while.

December wheat dropped to close at €317.25/t on Wednesday evening (17th) and then fell as low as €301.25 during Thursday’s trading, but picked up slightly to close at €306/t.

Prices recovered slightly on Friday when the market closed at €310/t and again on Monday, which closed at €316.75/t. Price recovery continued on Tuesday, with the December contract settling at €326/t at close of business.

This most recent price surge seems to be driven primarily by maize news. The early crop tour inspections in the US are indicating a lower yield level than that being used by the USDA. This news was then compounded by further cuts in EU maize production estimates.

Supply remains a concern

Prices were pressured last week following WASDE forecasts of increased wheat production and potentially favourable weather in the US.

But then, as is usual in this seesaw market, came further news that challenged the ability of crops to hit the previously forecasted output levels.

Now, overall grain supply seems likely to remain tight and the spotlight is on global maize output.

While recent Ukrainian grain exports have acted to keep a lid on price expectations, suggestions that shippers are shy about visiting Russian ports seems to be adding to supply pressure from other exporting nations.

This leaves market sentiment bullish for all grains in the medium to longer term, despite current harvest pressures.

Demand concerns

While tightness is evident in overall grain supply, demand levels are also uncertain. This is due to fears of recession and where that might bite first and worst.

The initial focus is on China, but a global recession would have a broader impact.

Oilseed rape markets suffered big falls last week too on the prospect of higher global output levels and Ukrainian oilseed exports.

November 2022 contracts dropped from €656.25 last Friday week to €601.5/t last Friday, while November 2023 contracts dropped from €642.75/t to €600.25/t. Both positions picked up slightly this week.

Native prices

Physical prices here remain similar to previous weeks following uncertainty at the end of last week. However, the €20/t recovery in futures prices sees November wheat remain in the €345 to €350/t bracket with barley at €330 to €335/t.

Imported maize prices are somewhat firmer too on the back of the very strong dollar which is also impacting on soya bean meal prices currently.