International grain prices have fallen from the highs encountered at the start of last week.
This had begun at the time of writing last week and the total movement has seen MATIF December wheat fall from a high of €231/t to €218.75/t at the end of last week.
It has picked up slightly again this week, mainly on the back of maize.
On balance, the wheat market could be described as largely flat and lacking information to drive it on.
Maize continues to be the major driver and, while prices fell last week, December Chicago maize has virtually made up all lost ground again to continue its upward price trajectory.
The main driver continues to be the well-documented dryness in Brazil.
However, while planting conditions in the US are described as very good for maize and soya, there seems to be a growing awareness that good (dry) conditions for planting could result in moisture stress for growth, leaving early concerns for yield potential. While it is early days yet, this concern is now affecting market sentiment.
Wheat is less strong
In general, market sentiment for wheat is less strong for the coming year. There are no current big risks to production, closing stocks are predicted to rise again and recent rains across important parts of Europe are reinforcing production capability.
Were it not for the concerns over maize supply, wheat prices could be considerably lower.
Forecasts for 2021 production suggest that maize production will be up nearly 60Mt on last year to 1,192.6Mt, but consumption is put at 1,202.9Mt to result in lower stocks.
Consumption of barley is expected to be broadly similar to this year, but production is expected to be lower, given the return to higher winter wheat plantings in Europe. Stocks are expected to decrease slightly, but to remain high at 30.6Mt.
However, it is possible that barley consumption could increase on a value basis on the back of maize production issues and current maize price trends.
Nearby prices continue to hold strong due to the tightness in general supply and the recent increased demand for feed arising from the cold weather and lack of grass growth.
Nearby wheat remains in the €245 to €250/t bracket and barley has strengthened slightly to around €225/t.
However, November new-crop prices are weaker, based on current supply and demand predictions. Wheat is back to between €220 to €224/t for November and barley is also back to €205 to €210/t. November maize is also back about €5/t on last week.