Grain Trends: taxes and weather hit markets

Grain prices declined considerably last week, but were recovering early this week.

Looking at the December French wheat price as an example, that market had been trading up and down over January, but was generally over €231/t.

On Monday, that price closed at €229/t, but came back up to €231.25/t on Tuesday evening.

Prices also tumbled in the US. Market reports suggest that funds were selling positions and prices lowered as confidence dropped.

This week, Reuters reported that France, the biggest grain producer in the EU, could lose its place as the sixth-largest wheat exporter in the world to Argentina.

It has lost out on some exports to countries such as Algeria and has been struggling to compete against competitive Black Sea grain.

Agritel reported on Monday that “French port shipments are at a standstill”. Argentina has also reduced ex-port taxes, which may see it be more competitive. The wheat and maize export tax has gone from 12% to 9.5%.

The Agriculture and Horticulture Development Board (AHDB) reported last week that only 30% of maize in Argentina was in good or excellent condition, down from the same time last year, and this may offset some of the impact of the tax reduction.

There are reports that cold weather has damaged some of the winter wheat crop in the US. Rain in some parts may help crops.

There is also reported to be dry weather in the Black Sea region. These are all things to keep an eye on, as weather can affect yields and supply.

Oilseed rape

Nearby French oilseed rape prices fell significantly in recent days. The May price went from €530.75/t to €523.75/t last week and was at €511.50/t on Tuesday.

The November price, which may be more related to the Irish harvest price, was more stable and was at €85/t on Tuesday.

Oil prices were up on Tuesday of this week. This may help the market. There is expected to be a big soybean crop from Brazil, so this is something to watch out for, as it could affect oilseed markets.

Barley

In the UK, the AHDB reported this week that barley exports from the UK are down.

From January to October 2024, 103,360t of barley were imported from the UK, down from 156,560t in 2023.

Barley crossing the border from Northern Ireland was up in the same time from 22,630t in 2023 to 33,165t in 2024. However, barley supplies are tighter in the UK, so this should not result in grain being offloaded at lower prices.