Wheat and maize prices continued their downward trend last week in Chicago and the EU, but are on the rise again.

MATIF wheat closed last Friday at €199.50/t but was back up to €204/t at Tuesday’s close. The previous Friday it had closed at €206.75/t.

Chicago wheat and maize were also significantly down on the previous week.

Weather was a major factor last week, as crop prospects continued to improve in many production regions.

However, this week’s USDA figures reversed price sentiment once again on the back of a further reduction in Brazilian maize production and a significant reduction in forecast US spring wheat output.

This was helped by poor harvest weather in parts of Europe, which has generated quality concerns, especially for wheat.

WASDE report

Earlier this week, the USDA released its July world agricultural supply and demand estimates (WASDE).

The big surprise was the reduced US spring wheat production – the lowest in over 30 years and almost 40% below the recent five-year average.

While it is not a massive tonnage in total (about 6Mt lower than last year), this loss of quality wheat is added to by the concerns from Canada and the rain-related concerns from Europe.

The report also reduced Brazilian maize production for 2020/21 by 5.5Mt to 93.0Mt. This had been expected and the reduction is in line with Conab’s estimate. Others still believe that production will be even lower.

However, the report increased US maize production by 4.5Mt on its previous estimate, to 385.21Mt. It was also noted that Chinese maize imports were kept at 26.0Mt, even though its domestic production is forecast to be higher.

Global wheat still looks set to be a record crop, but production and demand now look a little tighter.

Production estimates have been decreased for Canada, the US and Russia, with increases in Australia, EU and Ukraine.

The overall numbers indicate a decline in global wheat stocks and a slight increase in maize.

Native prices

With combines already rolling in many parts of the world, harvest supply and price pressure are beginning to bite.

Nearby wheat is weaker and barley is highly influenced by old- versus new-crop.

Nearby wheat is now in the €245 to €250/t range, with old-crop barley similar, but new-crop is around €230/t.

November prices remain around €210 to €215/t for wheat, with barley around €200 to €205/t.