Commodity feed markets continue to be highly volatile, with many of the base grain prices virtually doubling in the past 10 days.

Trading screens are continually flashing and on Friday, all markets are up substantially.

It should be said that we have seen considerable price rises in recent days also, increases that were frequently eroded within a few hours. But the trend is upwards.

Two weeks ago, dry wheat and barley from an Irish store was either side of €305/t. On Friday, farmers told me that they have been offered €360/t for wheat and €350/t for barley. And futures markets have risen considerably since then.

MATIF futures

On Thursday night, the MATIF futures market for March wheat closed at €381.75/t. At 1.30pm on Friday, that was €421/t, having been at €424/t a short while earlier.

New-crop or December wheat closed on Thursday night at €300.50/t. A few weeks ago, this was trading around €250/t and at 1.30pm on Friday, this was at €314.50/t.

This level of volatility makes it difficult for any market to function. Buyers do not want to buy and sellers do not want to sell and many customers cannot afford to pay for the feed produced.

Response

The market response in wheat has been far more vigorous than in maize, but it too continues to trend upwards. The level of increase in the US Chicago market shows the recent story very clearly in Figure 1.

This is a direct lift from the Chicago trading screen taken at 1.30pm on Friday 4 March. In this, the price is shown in US cents/bushel.

Screen image from CBOT trading at 1.30pm Irish time on Friday 4 March.

A run of wheat price over time would be in the order of $5.50/bu. Since the middle of last year, that moved to around $7.50/bu and on Friday it is at $$13.40/bu.

Chicago maize, which would have traditionally been close to $3.50/bu, is trading at $7.714/bu.

Activity

The red and green bars at the base of the graph reflect the level of fund activity.

This was very significant last week, as funds sold to lock in profits, but that seems to be decreasing in recent days and the volatility is happening more as a result of real trading activity.

This price escalation is also working its way through many other feed stuffs, as all crop products have seen considerable price increases in recent days since the conflict began.

And these higher prices are working their way down to the by-products that supply the feedstuffs. The single certainty in this is that the volatility will continue.