Grain markets increased again this week, as we enter the main part of the harvest and wheat has become the main market driver.
Whether this is justified or not remains to be seen, but the market seems to be moving from weather-related drivers to actual yields, as combines roll deeper into the harvest.
Spring wheat in the US was expected to be poor, but actual harvest yields are even lower than expected. This is adding pressure in the quality wheat and futures markets.
On 9 July, MATIF December wheat closed at €199.50/t. Since then, it has increased and it closed last Friday at €225.50/t and €230/t last Tuesday.
Normally, harvest pressure in the northern hemisphere would push prices downwards, but harvest difficulties in France are preventing supplies getting to market.
This is leading to the bigger fear that potential milling wheat there will fail and end up on the feed market here.
In the short term, there is added availability pressure, which is increasing the value of native product.
The main factors
Maize markets have had no recent major market-driving news.
The fact that China cancelled another US cargo did not help, but that could quickly change if anything were to challenge US maize output.
However, if global wheat production were to slip significantly below demand, this would provide a lift for maize.
It is interesting to note that output forecasts for Russian wheat were lowered again last week.
The International Grains Council (IGC) reduced Russian wheat production by 450,000t, while an internal forecast put this reduction at 2Mt.
Following the poor growing conditions in North America, the IGC reduced its Canadian wheat production forecast by 3.8Mt, with a further 3.5Mt reduction in US production.
The general strengthening in the markets saw native prices for new-crop grains increase again this week.
Nearby prices for wheat have weakened, as import prices fall with harvesting under way.
Nearby wheat is generally around €240/t, while dry barley is back around €220/t. But end-user prices could be more than €10/t higher than these.
November wheat is now up to €230/t and barley up at €220/t. These price levels are as high as the market has been all year.
Oilseed rape has picked up slightly too, with new-crop prices now up on €510/t dry for the export market and possibly higher for those with a local market.