International grain prices have had another strong week, with wheat increasing on both sides of the Atlantic.

MATIF December wheat closed last week at €276/t, with what looks like a record contract weekly close. The previous highest weekly close I have on record was €269.75 on 23 July 2012.

The situation was somewhat different in the US, with Chicago wheat closing lower last week, but it picked up considerably early this week. US maize was broadly similar, as price fell for much of last week but picked up again since last Thursday to move into the $5.30 to $5.40/bushel range.

Wheat markets continue to benefit from the tighter global stocks estimates in last week’s WASDE report. Maize was initially suppressed by the higher production estimates and the forecast of higher closing stocks, but it seems that this is now waning also.

Changing market tone

However, the recent AHDB report suggests that the strength in the wheat market may be starting to take its toll on demand. Price has a habit of turning a possible deficit into a surplus as the market searches for alternatives.

Egypt reportedly cancelled a tender for November/December delivery last week and Chinese wheat imports may be down for September.

The feeling on maize is still for higher production and a slight increase in stocks. This had some downward pressure on prices, but this seems to have turned again.

This may be influenced by the fact that South American countries are a significant factor in the higher supply estimates. However, recent changes in the La Niña weather event have raised its status from ‘watch’ to ‘alert’.

This may change output prospects, but the market seems to be factoring in the risk for the time being.

AHDB conference

Last week’s AHDB Market Outlook conference was neutral on wheat and barley prices going forward, but it was marginally negative on maize. La Niña will have a major impact.

Native prices

Native prices increased again this week, reflecting both market strength and the significant increase in bulk freight cost, which has more than doubled.

Nearby wheat has moved into the €270s, with barley between €260 and €263/t. November ’22 wheat is a strong at €230/t with barley at €218/t.

Oilseed rape futures continue to rise, with MATIF November ’21 crop rising by €15.50/t on Tuesday alone to €689.25/t – up €16.75/t since last Friday’s close. And these are despite a significant fall in price in the early days of last week.