What might have been a turn in markets towards the middle of last week did occur for maize, but it has lost all that advantage and more since then.
Futures prices for new crop continued to slip week on week, as the general tone of market news favoured production.
This has seen MATIF December wheat fall from €229.75/t at the close of business on 7 May to €204.50/t on 25 May.
Chicago wheat also continued downwards. CBOT December wheat closed at $7.652/bushel on 7 May and this was down to close at $6.66 on 25 May.
Similarly, Chicago maize for December has fallen from a close of $6.364 on 7 May to $5.154 on 25 May.
This significant slide in prices follows more favourable supply-demand sentiment across all grains.
It does not guarantee that output, but it does mean that buyers will be slow to do forward business and that sellers will be even less likely for the moment.
The pluses and minuses
The market for maize was helped last week by Chinese purchasing of US new-crop corn.
China had purchased over 1Mt per day up to the end of last week and that did support the market for a while.
Late last week, favourable forecasts for US weather, with warmer and wetter predicted for the next few weeks, increased output expectations and this sparked profit-taking by fund investors at the end of last week. This sell-off further precipitated weakening prices.
While there are still huge uncertainties over Brazilian maize production, sentiment for the moment is dominated by US production capacity, with all eyes on the first formal planted area estimates next month.
Improved crop prospects in the US and the EU were largely negative on wheat sentiment in the past week also. However, some spring wheat areas in the US still need rain, while some spring wheat areas in Canada remain dry, despite recent rains.
One other issue in the wheat market was the report last week from Russia’s agriculture ministry which suggested that wheat exports will rise by 3Mt, to 51Mt, for the 2021/22 season. This is despite its production forecasted to be down 6.1Mt. One might read higher internal stocks into that situation.
New-crop back €10/t
The change in sentiment has meant that all new-crop prices are weaker this week. Nearby markets remain strong, with wheat around €250/t and barley is now up towards €240/t. However, new-crop prices are weaker, with dry wheat now at €210 to €215/t and barley between €202 and €205/t.