Grain futures prices continue to slide as sentiment on Black Sea supplies continues to indicate surplus availability.
Last Wednesday week, December MATIF wheat settled at €326.50/t, by Friday this was down to €320.50/t and it settled at €308.25 on Tuesday of this week.
December 2023 wheat prices followed the same trend, settling at €293.25/t, €287.25/t and €278/t on those same days.
So there has been a very significant drop in price levels relative to the heady days of over €440/t back in May.
External wheat pressures
Pressure on wheat price has come from two main sources - competition from Russian grain, plus increasing concerns over demand from China.
Black Sea wheat is very competitive in price terms, both from Ukraine and Russia, and these sources continue to pressure global prices. They are also competitive relative to European and US exports.
Meanwhile, wheat production in Argentina has been decreased yet again (12.4Mt). This same dryness is affecting maize plantings and on soya bean potential.
Maize prices were depressed last week when the US Environmental Protection Agency proposed lower than expected increases to US biofuel blending mandates. This means lower demand. US maize export figures also seem to be well back on last season.
That said, the recent AHDB report suggests that just under half of the Ukrainian maize crop will remain unharvested over the winter months, according to UkrAgroConsult.
The latter also projects that the area sown to maize in Ukraine in 2023 will be back nearly 1Mha, to 4.56Mha.
Previous estimates suggested a substantial reduction in wheat production also and, together, these affect potential exports next season.
It is also worth remembering that export potential from Ukraine in 2022/23 includes carryover stock from 2021/22 plus the current year surplus.
This time next year, that carryover will be gone and the new crop looks set to be much smaller. This will leave less grain for export.
The general sentiment in the market today makes pricing very difficult. Buyers seem to be well covered now as we move into the Christmas season and with imported prices falling substantially, nearby native prices are now well below their green price equivalent of a few months ago.
Nearby wheat is currently at or below €315/t, with barley around €300/t.
November 2023 dry price offers are around €290/t for wheat and €275/t for barley.