Grain markets picked up significantly at the end of last week for mainly technical reasons.
MATIF December wheat closed the week at €337.75/t, the highest level seen since late June. It then eased back on Monday, but still managed to close at €335.50/t following a lowering of production numbers in the US.
The USDA’s World Agricultural Supply and Demand Estimates (WASDE) report earlier this week significantly reduced its maize output estimates (not as much as trade estimates) through a combination of reduced planted area and yield.
This gave further impetus to markets and prices late on Monday and into Tuesday when the December MATIF contract closed at €336.25/t.
The lower maize production area caught the market by surprise as the area sown to soya beans was also lower. Maize and soya have both swung back to an upward price trend in Chicago. The altered land use seems to have swung to cotton production.
Markets were also supported following the comments made by Russian president Vladimir Putin regarding the unfairness of the Black Sea grain corridor for poorer countries. This has caused concerns over its continued use and will certainly cause concern for shippers.
Wheat production in Russia is now estimated at 97Mt according to a market analyst there. While production was expected to be high, we must remember that the first casualty of war is truth, so it is difficult to be confident in the validity of any such statements.
In Australia, the government’s (ABARES) recent crop report indicated a wheat crop of up on 32.2Mt.
Back in the northern hemisphere, a report released in Canada last week indicated that wheat stocks there were just 3.7Mt as of 31 July. This is down 38.3% on the previous year and is mainly a result of the poor harvest caused by drought in 2021. However, production and exports are expected to be up considerably this year.
Markets here remain volatile and difficult to pin down due to the lack of overall business. Sellers are reluctant to sell and buyers are mainly buying as needed.
Wheat markets continue to be supported by maize, as concerns around global grain supply remain tight.
Native prices remain volatile, with minimal business taking place due to uncertainty.
Wheat for November is currently around €350 to €353/t to the trade, with barley around €10/t lower.
Current price offers for oilseed rape for November 2023 range between €600 and €610/t for dry crop.