Grain prices had another turbulent week. Following a period of decline, MATIF December wheat futures bottomed out at €316.25 on Wednesday of last week, having closed at €343.25/t the previous Monday. They later improved to close at €345/t last Friday.

Prices eased back again on Monday of this week to close at €342.50/t, having been as high as €355.50 during the day. Another drop on Tuesday saw markets close at €332.50/t.

It is difficult to rationalise market movements which saw both wheat and maize prices recover towards last weekend. The fear of a global recession is certainly one of the concerns being talked about.

Market influencers

The recent AHDB report suggests concerns around Argentinian wheat crop. Unfavourable weather seems to have reduced plantings there.

Closer to home, temperatures across Europe look set to be abnormally high over the next week or so. Conditions to date are thought to have decreased grain fill, possibly giving high proteins with low specific weight.

This could cause rejection for milling and add to supply concerns.

The euro continues to weaken against the dollar as they approach parity and this is not helping to instil confidence in European economies. There is a fear that demand may suffer in the event of a recession.

Harvest pressure is an obvious factor in the short term but many believe the fundamentals of supply and demand will mean a tight global supply outlook in the longer term.

Yield prospects seem to have improved for the smaller US maize crop area, thus adding to potential supply.

This month’s WASDE (World Agricultural Supply and Demand Estimates) from the USDA puts total grain production down about 4mt from last month, with stocks up a little due to lower demand.

While there may be more potential in US maize production in the short term, global supply is expected to remain tight.

Native prices

Native prices are generally a bit higher this week but still subject to some of the weakening that occurred earlier this week.

We are now seeing harvest pressure, with imported prices setting nearby price trends and a widening gap between wheat and barley – around €370/t and €350/t respectively.

New crop prices are obviously very volatile with at least €10/t swings within a day. November wheat to the trade is currently put at €340-€350/t, with barley at €325-€335/t.

Imported maize for the same time period is now around €335/t ex port.

November MATIF rape price closed down on Tuesday at €675.25/t.