Grain futures prices weakened further in the past week, despite some recovery in the middle of last week.

MATIF December contracts closed last Friday at €283/t, down from €299.25/t one week earlier. And they closed last Tuesday at €280.25/t.

Chicago wheat was largely flat over the past week and Chicago December maize is also running flat.

December ’22 contracts are lower, but still close to historically high levels and tending slightly upwards this week due to good demand numbers.

The story with MATIF maize is broadly similar, with new crop for next November remaining in the €220s since the end of October.

Market influences

Uncertainty around the new Omicron COVID-19 variant continues to spook the markets and cause worry among fund holders in particular.

Output from the 2021 Australian wheat harvest was raised to a record 34.4Mt last week by the Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES) as a result of higher-than-expected yields. This estimate is 3% higher than last season.

Grain quality there remains a concern, as November has been the wettest on record for most regions of New South Wales.

Meanwhile, the Canadian wheat crop estimate has been slightly reduced, according to this week’s AHDB report. But strong demand from Middle East and north African countries seems to be limiting further wheat price losses and EU exports remain strong.

In the US, it is expected that renewable fuel mandates and eligibility for credits will be made known in the coming days. Ethanol production has been strong in recent months and this is helping to support maize prices.

Another rumour from Russia suggests a wheat export quota of 9Mt from 15 February to 30 June - larger than expected.

This week’s world agricultural supply and demand estimates from the USDA is likely to guide market direction for the transition into the new year.

Native prices

Following a slight weakening in our physical market prices last week, nearby prices are stronger again this week due to tight supply and the high cost of imports.

Nearby wheat is back up in the €305 to €310/t bracket, depending on the day, and barley is around €300 to €305/t.

New-crop prices are more influenced by futures markets and they show more volatility as a consequence. November ’22 wheat continues to float either side of €245/t with barley either side of €235/t.