Futures grain markets had another topsy-turvy week. Having pushed up to €297.25 at the close of business last week, MATIF December wheat fell this week and closed on Tuesday at €289/t.

Nervousness and profit-taking continue in the market, which had been expected to fall again this week. But sentiment remains strong for wheat and barley is tracking it.

While markets on both sides of the Atlantic fell early this week, they picked up again on Wednesday and it is worth noting that nearby contract prices are at record-high levels.

It is believed that the fall was precipitated by events in Europe when a big importer increased its quality specs, which impacted negatively on France as a supply source.

This move is also acting to slow or decrease EU exports, which have been moving at a strong pace since last harvest. Some believe that the EU itself could run out of grain before next harvest if this pace of exports were to continue.

Markets also experienced a strong sell-off early this week, which acted to pressure futures prices in the short term.

Last week’s drivers

The current AHDB report says that the Russian agriculture minister has indicated a possible change in the formula used for export tax calculation should prices reach $400/t (€353/t).

They also indicate that Russia may introduce an export quota from mid-February 2022 until the end of June 2022.

This report also indicated that high maize prices in China need to be watched. Last week, Dan Basse told us that Dalian maize futures there were $10.78/bushel compared with $5.60/bu in Chicago. So imports will still be competitive while internal prices rise further on the back of wet harvest weather causing logistical issues and increased drying costs.

Meanwhile, a global shortage of lysine (logistics driven) has increased demand for soya bean meal, resulting in a price surge in recent days. December Chicago meal prices have risen from around $332/t (€293/t) last Monday week to over $370/t (€327/t) this Tuesday.

Native prices

Native grain prices strengthened again this week. Nearby wheat continues to knock on the door of €300/t and this price was available at times in recent weeks. Trade prices are floating around €295 to €300/t for wheat and €290 to €295/t for barley.

Prices for next November are now around €245/t for wheat and €230 to €235/t for barley.

New-crop oilseed rape also continues strong, to leave a possible green price above €520/t currently.