Grain prices have dropped sharply amid lacklustre demand and increasing new crop supplies from the southern hemisphere.

London wheat futures ended the week to Tuesday down by £6.50/t, to £154.50/t for January, with November futures losing £3.25, to £146.75/t. The slide followed a bearish report released by the US Department of Agriculture last week, which revised global wheat stock production up by 1.2m tonnes, to a record 712.7m tonnes, and ending stocks up by 2.62m tonnes, to 185m tonnes.

Maize production was 2.6m tonnes higher than the previous estimate, at 967m tonnes, but a 2.2m tonne reduction in closing stocks, to 160m tonnes, lent support to US maize values.

Soya bean markets strengthened in response to the figures, which put US stocks below trade expectations, according to a report by HGCA. “The South American crop will now be anticipated to bring some relief this season.” Current forecasts put the Argentine crop at 54.5m tonnes (49.3m tonnes in 2012-13) and the Brazilian crop at 89m tonnes (82m tonnes in 12-13). “If realised, both would be record crops. However, the weather in the next few months will be critical to realisation of these estimates, barring other issues such as export logistics experienced in the region last season.”