International grain prices have been through another volatile week.

December maize bounced from side to side over the past week but wheat was more bearish, with a largely downward trend since Wednesday of last week.

MATIF wheat broke below the technical barrier of €204/t last week and this could see it move lower again.

Wheat is already in an over-supply situation globally so maize was the major driver of downward price pressure. Chicago maize picked up a little again this week as rain promised for many parts of the US midwest last week did not fall.

Global wheat continues to be pressured by expectations of oversupply but it is still supported by maize.

The one exception would appear to be US spring wheat where dryness is helping price for a product that is in high demand.

Change of sentiment

Perhaps the major pressure on prices last week was the International Grains Council’s June global production estimates.

This put global grain production at a record 2,301m tonnes, enough to increase total closing stocks for the first time in five years.

Prices weakened as a consequence and maize production edged closer to consumption. But many things can still happen to erode that 2Mt surplus.

Weather is key to market sentiment and a return to hot, dry weather in the US could push prices higher once again. However, without it, prices could continue to drift lower.

This week the USDA will give its update on US planted areas and stock reports. The market expects US maize area to be 3% higher that its equivalent March value and this has sparked speculative selling ahead of the report.

However, a smaller than expected area could push prices higher.

Some estimates of the Brazilian maize crop continue to indicate lower production but there is no agreement on what lower will actually be. However, this will become clearer soon as harvesting of that crop is now under way.

Harvest under way

Winter barley harvesting is now under way in south and central Europe so harvest price pressure can be expected, that is unless yields are poorer than anticipated.

Native prices

Nearby prices continue to hold firm but imported new-crop barley is likely to be available shortly to pressure prices. In the meantime, wheat and barley are both around €250/t.

Weaker new-crop markets have November wheat back to around €210 to €215/t and barley at €200 to €205/t.