Grain prices took a significant jump towards the end of last week when MATIF December futures wheat closed at €346.25/t compared with €333.75/t a week earlier.
Indeed, that contract settled at €349.25 on Thursday night, having increased by €20/t in two days’ trading. It settled at €348.50/t on Tuesday.
Market sentiment has taken wheat futures prices into the €335-€350/t band, but concerns over recession and overall demand are still very real.
MATIF November maize prices increased by a similar amount and this contract closed at €338.50/t on Friday of last week. Maize remains the main market driver on the supply side, with production estimates from the EU and US harvests still being revised downwards.
Currency has become a very real factor once again, especially sterling and the dollar.
Fears of further escalation in the Russia-Ukraine conflict supported wheat prices over the past week. Increased tensions call into question the future of the Istanbul Agreement, which was to last for 120 days from 22 July to 18 November.
In the current circumstances, it is possible that this might not be extended, if it even survives that long.
The fall in markets at the end of last week was a sell-off by funds due to fears of a downturn in global economies.
Global recession continues to be a real concern in all markets, as rising inflation may impact on demand and the longer-term price outlook.
Harvest pressure is now impacting to some degree on maize prices. An estimated 12% of the US crop was harvested as of 25 September, according to the USDA. This week’s AHDB report indicated that 26% of the French maize harvest was completed by 19 September.
Oilseed rape volatility
Oilseed rape futures prices strengthened last week, having fallen for the past few weeks.
This is due to renewed concerns over future sunflower exports from the Black Sea region, coupled with a reduction in Canadian canola output numbers.
High volatility means that markets are relatively inactive, making prices difficult to pin down and very variable.
However, as things stand, the best indication is that near-by wheat is in the €350-€355/t range, with barley at €340-€345/t. These price levels would support green barley prices of in excess of €300/t.
The November ’22 oilseed rape futures contract closed at €602.75/t this Tuesday, while November ’23 closed at €615.75/t. The latter price closed at €620.25 on Thursday of last week.