International futures markets continued their volatility through Christmas and the new year. December ’22 MATIF wheat closed on 31 December at €250.50/t and at €252.25/t on 4 January, which was up €4/t on the previous day.

All markets have been down and up over the holiday period and that seems to be continuing. Nearby prices continue to have the greatest volatility.

Nearby maize in Chicago increased all through December, but weakened slightly over the break, with a significant fall last Monday. However, this recovered fully on Tuesday.

It would seem that maize was the main driver of markets in recent weeks and wheat also seems to be taking direction from this, with both old- and new-crop wheat shadowing maize currently.

However, new-crop maize has seen less volatility while shadowing the sentiment in the nearby market.

Weather concerns

Weather in South America once again seems to be the main factor supporting both maize and soya bean markets.

The general dryness towards the end of 2021 gave rise to concerns for yield potential, but rain since then resulted in a return to price pressure.

However, this rain may be too late to help yields and it has since caused floods in parts of Brazil. The situation is broadly similar in Argentina, but the later harvest there may see a yield benefit from recent rain.

The market now awaits a reappraisal of output potential to give it direction. Some commentators now wonder if this might be more bullish than had been anticipated. But, in the meantime, preliminary estimates from some forecasters suggest that US maize exports were down once again, with consequences for stock levels.

Wheat markets were again supported by maize in recent weeks, but there was little in terms of news that benefited wheat directly.

However, it is now reported that condition ratings for US winter wheat dipped in some areas over Christmas, especially in Kansas and Oklahoma. Some of these areas suffered from recent windstorms on top of moderate drought conditions.

Native prices

Prices here are back slightly as we enter the new year on the back of somewhat weaker market sentiment. While physical prices tend to be more stable than futures, spot positions are back a little this week.

Nearby wheat is now in the €300 to €305/t range, depending on the day and the position, while barley is between €300 and €305/t.

New-crop positions are also slightly weaker this week, with wheat generally in the €243 to €248/t range and barley between €233 and €238/t.