Nearby grain positions in Europe took another jump early this week with MATIF March wheat closing Monday at €250/t, but closed Tuesday at €245/t. MATIF November maize seems to be steadier, hovering around the €188/t mark, but nearby maize closed at €228/t on Tuesday night. Oilseed rape has taken the biggest jump with May positions up from €460/t last week to close on Tuesday evening at €502.50/t, with August prices up from €417/t last week to €426.75/t at close on Tuesday.
The early days of this week saw a somewhat different situation in the US, with wheat and maize prices falling on Monday to rise again on Tuesday. At the start of this week CBOT March wheat traded relatively close to December wheat – $6.632/bushel versus $6.552/bu.
Chicago maize had a similar story with prices softening on Monday to more than make up the drop by close on Tuesday. But December maize has been on a much steeper trajectory.
Last Tuesday, Chicago March maize closed at $5.606/bu while December closed at $4.756/bu. While the gap between March and December is bigger than for wheat, it is still much smaller than it was some weeks ago.
While there were bits of news to both support and pressure prices in recent days, one of the most relevant was the setting of the maize crop insurance price in the US. The AHDB report this to be at $180.31/t for most areas, up from $152.76/t last year. This higher price could support the predicted maize area increase in the US.
Last week, the International Grains Council increased its global wheat production estimate for 2020/2021 by 4.9mt, to 772.8mt, according to the AHDB report. This increase was mainly attributed to higher Australian production, up by 2.2mt to 33.3mt. It also increased Russian wheat production by 0.8mt to 85.3mt.
China is also reported to be pushing up its maize area this year to help feed its internal demand. Import demand from China has been a major driver of international demand and price increases in recent months. It is reported to be set to increase its maize area by 667,000ha to 41.97mha.
Nearby native prices are somewhat stronger again this week as old-crop supplies tighten, especially in Europe. Prices have been moving about but nearby wheat has generally been between €245 and €250/t in recent days.
Nearby barley has also edged up into the €216 to €220/t range. New-crop wheat for November is in the €203 to €205/t range and barley is either side of €192/t.