Grain prices have become livelier since early last week, with increased futures activity in all the main grain classes. As a result, there is a somewhat firmer tone, even in the physical market, but no great sign of any rise in prices for the moment.

The dryness in Argentina is the dominant driver, as both soya and maize are at their critical flowering stages when heat could damage fertilisation. This is especially affecting soya, as that country is the biggest exporter of soya bean meal globally.

That dryness is also a cause of concern for maize, but wet weather in Brazil is having an even bigger impact. Wet conditions are preventing the planting of their summer crop and so acreage and/or yield could be down as a consequence.

Dryness in the US continues to affect the wheat market there, where an increasing proportion of the crop is regarded as suffering to some degree. But most of these are still potential rather than real problems.

Wheat prices are also being helped by problems moving grain in central Europe, plus a reluctance to sell in the EU. Funds and currency continue to play a part also.

Native prices remain pretty much the same for old crop, but there is a slight move on new crop. Nearby wheat and barley continue to trade around €173 to €176/t from here to May, but November wheat is now €172/€173/t with barley at €165 to €167/t.