Grain markets continued strong this week, with MATIF December 2021 wheat contracts closing last week at €269/t compared with €264.25/t at the end of the previous week. Price has continued upwards since then, to close on Tuesday of this week at €271.50/t.
Markets strengthened due to increased trade activity and also speculation that Russia may extend its tax on exports beyond the expected date.
As well as these, exports from the EU are up considerably on previous years at this point.
Across the Atlantic, US wheat prices eased over the past week, with slow exports cited as the main reason. But as well as this, favourable weather for the ongoing maize harvest pushed prices there down.
Maize market sentiment was also influenced by the Conab forecast for the Brazilian 2021/22 maize crop of 116.3Mt, up 34% as a result of increases area and yield.
The US world agricultural supply and demand estimates (WASDE) report published on Tuesday was largely supportive of wheat and negative on maize prices.
Its global wheat outlook for this marketing year is for reduced supplies, lower consumption, similar trade levels and lower overall ending stocks.
Overall supply, from production and stocks, is projected to be down 8.6Mt mainly due to decreased production in Canada and the US.
Canadian wheat production is again reduced downwards by 2.0Mt to 21Mt, mainly due to anticipated crop abandonment because of the hot and dry conditions last summer.
The report reduced world ending stocks by 6.0Mt to 277.2Mt.
On coarse grains, WASDE put US maize output higher, with overall use falling and higher ending stocks.
However, global coarse grain production is now forecast to be down 2.9Mt to 1,494Mt, but with larger ending stock numbers.
EU maize production is raised slightly, but output for Russia and Ukraine are lowered based on harvest results to date. Canadian maize production was increased due to more favourable weather in Ontario.
All these combined, global maize stocks are 4.1Mt higher at 301.7Mt.
Native prices followed global sentiment up last week and are about €5/t higher this week.
Wheat to the trade is now around €265/t out to year-end, but it feels like it is still rising. Barley is around €10/t lower at a strong €255/t.
November ’22 price offers are currently €230/t for wheat, €220/t for barley and €500/t for oilseed rape.