Grain markets increased again over much of the past week, with new-crop dry wheat exceeding €330/t.

Markets were largely static for most of last week and news that war talks appeared to be making progress resulted in a weakening of all market positions for a period towards the end of last week.

However, prices picked up again, with MATIF December wheat having moved from a low of €306.75/t last week to a high of €337.75/t on Tuesday of this week.

The overall market sentiment is that supply looks tight on both wheat and maize, with barley following by default.

The price increases early this week were influenced by adjustments to global production numbers, which indicated a reduced level of grains available to trade in the coming season.

This was mainly due to changes in predicted output and supply from Ukraine.

Black Sea focus

Markets are now focusing on the potential crop size in Ukraine and Russia. The real impact here will be on the level of exports that may be available from the Black Sea region.

Markets continue to look at potential weather implications, such as the ongoing drought in the southern plains of the US. This is a major winter wheat producing region and problems there would add further to the Black Sea issues.

Supply lines

In its first major market assessment since the war in Ukraine, the International Grains Council (IGC) reduced its global trade projections for wheat by 3.0Mt last week and maize by 6.0Mt for the coming season.

This is predominantly influenced by war-related issues, but it also acknowledges that high prices are likely to drive demand rationing in most markets to reduce consumption.

The IGC projection reduced Ukraine’s maize exports significantly (down 10.8Mt) because of a considerable reduction in estimated production. This is partly due to a lower planted area, combined with lower yields due to input availability restrictions.

Native prices

As has been the case in recent weeks, physical prices far exceed their futures equivalent, with nearby wheat and barley currently trading in the €410 to €430/t range, depending on the time of day.

This makes things very uncertain for buyers and sellers and the volatility has forced people out of the market.

New-crop prices follow futures more closely and December dry wheat is now in the €320 to €330/t range, with barley close behind at €310 to €320/t. Glanbia offered €288 and €278/t for green wheat and barley earlier this week.

MATIF November dry rape closed on Tuesday at €760.75/t.