Grain market update: corn prices hit seven-year low

Just a few weeks ago, there was anticipation in grain markets that the development of corn (maize) and soybean crops in the US could be threatened by a forecast spell of hot and dry weather for the US midwest at the end of July and early August.

However, July has passed and we’re into the first week of August and the weather picture in the US is now much more benign than previously forecast with favourable rains expected this week for crops.

As a result, markets have turned bearish on corn with firm expectations now for another massive harvest in the US. On Thursday, corn prices traded on the Chicago Mercantile Exchange (CBOT) were pushed into seven-year lows at $130/t, despite a weakening US dollar and greater demand in export markets for US grain.

In Europe, crop quality remains the talking point, but large stocks of cheap grain coming out of Russia and the Black Sea region continues to weigh on prices.

Europe

On the Euronext exchange (MATIF) in Paris, rapeseed prices have recovered losses incurred earlier this week, while wheat and maize prices remain subdued.

December 2016 delivered milling wheat dropped slightly during Thursday’s trade to finish below €170/t, while December 2017 wheat fell below €178/t.

European maize (corn) prices have been flat this week with November 2016 maize at €165/t, while November 2017 maize finished below €174/t.

As mentioned, rape prices have rallied somewhat in the last two days after a poor start to the week with November 2016 rapeseed jumping by almost €8/t to finish above €364/t, while November 2017 rapeseed moved higher to €353/t.

Chicago

In Chicago (CME), corn prices hit seven-year lows as expectations of another bumper harvest become clearer. Wheat prices fell back somewhat on Thursday with December 2016 wheat down $2/t to $158/t (€142/t), while December 2017 wheat finished at $188/t (€169/t).

Corn prices from Chicago fell to their lowest point since 2009 on Thursday when December 2016 prices dropped to $130/t (€117/t). December 2017 corn is back to $146/t (€131/t).