Markets were largely flat again last week, as they digested the price excitement of the previous week. Physical prices here remain largely flat as a consequence, but wheat remains the major price driver.
Chicago maize prices eased somewhat at the end of last week, but they picked up a bit this week. Sentiment was influenced somewhat by forecasts of falling economic activity, but yield potential in the US seems unlikely to pass trend yields at this point.
Chicago maize picked up again this week, having seen six days of falling prices. As of now, it looks like we have a bullish sentiment across all cereals, but there is still no guarantee of harvest price level.
The Pro Farmer tour in parts of the US Corn Belt found a mixed picture for yields last week. These predicted yields to be up in Iowa and Illinois, the top two producing states.
The general feeling seems to be that yield potential is good in the east of the Corn Belt, but poorer to the west.
US maize output remains uncertain and some believe that area there may be increased.
Europe has a somewhat unique situation currently, where MATIF September futures are over €25/t higher than December, thus suggesting a nearby availability issue.
This is most applicable to France, where shippers had committed export contracts for milling wheat.
Now, with the spec set at 76KPH, there is a scarcity of wheat to fill these contracts due to the poor weather there.
This is forcing exporters to source grain on the futures market. So, demand is currently a key driver of EU prices.
Physical prices elsewhere are increasing also, with Russia, a key wheat exporter, slow to commit grain to the market to supply the high current demand level.
These issues are supporting European wheat, as the December MATIF contract closed on Tuesday evening at €246.50/t, up €2/t on its Friday close, while the September contract closed at €272.75/t.
Native prices remain broadly similar this week, but nearby wheat is slightly weaker, given new-crop supply and harvest progress. Nearby wheat is back around €245/t to the trade, while barley remains around €230/t.
Prices into November are broadly similar, reflecting the coming together of old-and new-crop. This has mainly happened through higher prices for new-crop. So December wheat to the trade is currently around €245/t, with barley around €230/t.
Dry oilseed rape is currently around €520/t.