Markets continue to bounce about a bit as news points market sentiment in opposite directions. One day, it’s news that limits production somewhere and then comes news that production estimates have been increased.

The most recent International Grains Council report increased 2016 global output estimates by nine million tonnes to 2015 Mt.

Issues with excess wet in Argentina continue to impact on markets, with maize now also being directly impacted by the delay in harvest there. While this has been positive for prices, increasing output estimates continue to signal a surplus harvest for wheat, with a neutral balance for maize globally. But the overall consequence of increasing global ending stocks is conditioning market sentiment for a harvest output that is now estimated to be the second-highest ever.

But just because crops have potential does not mean that it will be delivered. Heavy rain is currently causing problems in the US and France, where harvest is, or is just about, under way. That said, crops currently harvested in the US and Spain point to good relative performance, thus supporting the big output estimates.

Good grass growth has slowed native demand and nearby prices remain broadly similar, with wheat around €160 to €162/t and barley €10/t lower. New-crop prices are somewhat weaker though, with wheat to the trade in the region of €163 to €165/t and barley €10/t lower.