The general sentiment around global grain prices remains strong.
Following numerous attempts to drop, grain markets have strengthened again this week, with MATIF November wheat on the upper side of €330/t once again.
Wheat markets weakened last week around the optimism that surrounded peace talks, but this has since passed.
MATIF December wheat closed at €321/t last Friday, back from €338.50/t a week earlier. But it moved up again on Monday and closed at €328.75/t.
The rise continued on Tuesday when it closed at €334.50/t – so a significant rise in the two days to put it back into the €330t to €340/t bracket.
Wheat is main driver
Last week’s sentiment was also influenced by the USDA’s quarterly stocks and prospective plantings reports.
The wheat area was pretty much in line with expectations, but stocks were down slightly.
Factors which added support this week included the lowering of wheat crop conditions in the US, plus the realisation of the limited rail export capacity from Ukraine.
The most recent AHDB report is indicating that Kazakhstan is considering limiting its grain and flour exports. These have likely come in for increased demand since Russia announced a ban on exports.
Maize is pressured too
Maize markets have been continuously rising since early January and they have been further accelerated by last week’s US prospective planting report.
This suggested a reduction in maize area in favour of soya beans due to the higher nitrogen prices. However, this reduction was greater than had been anticipated and this helped drive prices.
This lower area increased availability concerns for new-crop maize. There is also ongoing uncertainty as to the planted maize area in Ukraine.
Demand for maize for bioethanol remains strong, with the US considering a 15% inclusion in petrol during summer months and Brazil likely to increase importation following the removal of tariffs.
Physical prices remain very variable, but they are all a little stronger this week. Nearby wheat is in the €415 to €420/t range, while barley ranges from €420 to €430/t depending on the day and time.
Imported maize has eased back to €390/t, but that may be trending upwards again too.
Forward prices are much less certain due to lack of activity in the market, but they are stronger than last week for those willing to do business.
November wheat is most likely in the €335 to €340/t range and occasionally even higher, with barley running about €10/t lower.