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International future markets continued to rally this week as wheat markets lead the charge after recording significant gains on last week.
Wheat
International wheat markets continued to rally over the week fuelled by dry weather concerns in several key production areas around the world including Russia, the United States and Australia.
Russia: Global markets are becoming more sensitive to weather in Russia which accounted for more than a fifth of the world wheat exports in the 2017/18 season. Russia’s spring wheat plantings have lagged where cold, wet conditions have slowed sowing this year. Persistent dry weather is also threatening Russia’s winter wheat yields. Russia’s Agriculture Ministry pulled back its forecast for the 2018 total grain crop by five million tonnes to a range of 105mt to 110mt last week down from 134mt last year.
Australia: Concerns over Australia’s 2018 wheat crop continue to intensify as the dry weather continues. It’s likely that less than a fifth of the country’s intended wheat plantings will have emerged at the start of winter. A much larger area has been planted but this is still waiting for rain to germinate.
The Australian Bureau of Meteorology reported that Queensland and NSW have received between 30% and 60% of average rainfall over the past year, leading to long-term deficits in both groundwater and surface water.
US: Continued drought conditions in the southwestern portion of the United States are currently reported to be at their worst levels in 60 to 70 years. However, the latest USDA planting progress report will be released later today and is expected to show that planting is near completion.
Soya beans
Elsewhere China has given the green light to state-owned companies to begin buying soya beans from the US once again. However, reports suggest that would-be buyers have tight crush margins and high inventories.
On the Euronext exchange (MATIF) in Paris, maize, oilseed rap and wheat futures recorded significant gains over the past week.
Paris maize for delivery in November gained €7.50/t over the week to finish yesterday’s trade at €177/t.
Oilseed rape for delivery in November recorded another strong gain of €7.75/t to €369/t.
Wheat for delivery in December also recorded a strong gain of €9.75/t over the week to finish yesterday’s trade at €189.25/t.
Looking across the water to the Chicago grain market (CME), maize, wheat and soya beans markets recorded gains over the week.
2018 December futures now stand at $168.26/t and $214.66/t for maize and wheat, respectively, up $1.50 and $10.36.
Soya bean futures for November delivery also recorded a strong gain of $5.44/t to $386.91/t.
Dry weather concerns drive price
International grain markets: market gains in Europe and further afield
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